On August 2, 2023, the National Labor Relations Board (“NLRB”) issued an order in a case against Stericycle, Inc. that adopted a landmark new legal standard for determining whether employer work rules violate the National Labor Relations Act of 1935 (“NLRA”). The order has significant implications for employers, necessitating a review of all work rules in light of the new standard.

The New Standard

The NLRA grants employees the right to engage in concerted or protected activities for the purpose of collective bargaining, including the right to form, join, or assist labor unions and to engage in discussions and actions related to improving their working conditions and terms of employment. The NLRA applies to almost all employers, regardless of whether an employer’s workforce is unionized.

Under the new legal standard, work rules that have a reasonable tendency to chill employees from exercising their protected NLRA rights will be presumed unlawful. The intention of the employer in adopting the work rules will not be considered when determining whether the work rule has a chilling effect.

The presumption of unlawfulness may be rebutted by an employer’s demonstration that the rule advances a legitimate and substantial business interest, and that the employer is unable to advance that interest with a more narrowly tailored rule. To demonstrate the interest, an employer should document the justification for each work rule and ensure that its rules are as narrowly tailored as possible.

Example

The NLRB’s Stericycle standard and its impact on employers may not intuitively make sense. The following is an example of how the Stericycle standard could work. An employer could have a rule prohibiting the use of cameras in the workplace. Previously, this was acceptable. We now need to look at this rule under the new standard. Under the new standard, this rule could reasonably chill an employee from exercising their protected NLRA rights, by prohibiting an employee from taking a photograph of a notice a manager posts on the factory floor telling employees that they may not discuss their pay. The employer should now modify this rule so that the general prohibition against cameras in the workplace has certain exceptions, for example, allowing employees to use cameras to document allegations of workplace misconduct, or to document unsafe or hazardous working conditions.

Actions Employers Should Take Now

Employers should take the following actions immediately:

• Conduct a review of and identify all workplace rules, policies, and procedures. The employer should then review the workplace rules, policies, and procedures through the lens of an employee and ask whether the workplace rule, policy, or procedure would chill or discourage the employee from engaging in a NLRA protected activity.
• Modify or revise existing workplace rules, policies, or procedures that could have such a chilling effect to be less restrictive.
• Create written documentation for each workplace rule, policy, and procedure demonstrating the employer’s deliberations and intent for each workplace rule, policy, and procedure and state the legitimate and substantial business interest for each workplace rule, policy, and procedure.

Consequences of Non-Compliance

Failing to update workplace rules, policies and procedures to meet the new standard, may result in the NLRB bringing a complaint against the employer for unfair labor practices. If found guilty, the NLRB could order various remedies, including reinstatement of a terminated employee, back pay for lost wages and monetary damages.

Conclusion and Contact

At this time of this writing, it is unclear whether the NLRB’s order will be appealed. We will monitor any further progress and advise as additional information becomes available. We can assist by reviewing your workplace rules, policies and procedures. If you have any questions regarding the NRLB ruling and its application to your business, please contact Kurtis Urien, Esq. at kurtis@mrclawcorp.com or call 714-972-2333.