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August 4, 2023
On August 2, 2023, in a 3-1 decision, the National Labor Relations Board (the “Board”) adopted a new legal standard to evaluate whether workplace policies are permissible under the National Labor Relations Act (the “Act”). Specifically, any employer policy that has “a reasonable tendency to chill employees from exercising their Section 7 rights”[1] may constitute an unfair labor practice that violates Section 8(a)(1)[2] of the Act. This long-awaited decision was reached in the matter of Stericycle Inc. and Teamsters Local 628, where the Teamsters Union challenged Stericycle’s policies regarding personal conduct, conflicts of interest, and confidentiality of harassment complaints, contending that even though the policies had a legitimate business purpose, they unlawfully limited the right of Stericyle employees to engage in protected concerted activities.
The Board’s decision in Stericycle modifies and expands the test set forth by the Board in its November 2004 decision in Lutheran Heritage Village- Livonia[3] and implicitly overturns its December 2017 decision in Boeing Co.,[4] where the Board adopted a balancing test to weigh the potential impact of facially neutral policies on employees’ rights under the Act against the employer’s legitimate justifications for implementing the specific policy or rule.
The parties in the Stericycle case will now proceed back to the administrative law judge to apply the newly adopted standard.[5]
The Stericycle Standard
Under this new standard, the Board’s General Counsel will carry the initial burden of showing that an employer’s policies inhibit employees’ ability to exercise their Section 7 rights. The Board will then view the subject policies through the lens of an employee who is subject to the policies “and economically dependent on the employer, and who also contemplates engaging in protected concerted activity.” The Board’s rationale for taking this position is that employees are generally in a vulnerable position in relation to their employers.
The General Counsel will meet the burden by showing that an employee could “reasonably interpret” the subject policies to have a coercive meaning. The policy will then be presumptively unlawful even if “a contrary, noncoercive interpretation” is also reasonable.
Counsel for the employer will have the opportunity to rebut the presumption of unlawfulness by demonstrating that the policies advance “a legitimate and substantial business interest” and that the employer is unable to advance that interest with more narrowly tailored policies.
Takeaways
The Stericycle decision is expected to have a major impact on the implementation and enforcement of workplace policies. Employers should review their current employee handbooks and other policies to evaluate whether a reasonable employee could view the policy as a limitation on protected concerted activity, and if so, whether the policies are narrowly tailored to promote the employers’ legitimate and substantial business interests without unnecessarily burdening employee rights.
[1] Section 7 of the Act guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” as well as the right “to refrain from any or all such activities.” See 29 U.S. Code § 157.
[2] Section 8(a)(1) of the Act makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the Act. See 29 U.S. Code § 158.
[3] 343 NLRB No. 646 (2004) (applying the standard that workplace policies may be deemed unlawful under the Act if the policies would “reasonably tend to chill employees in the exercise of their Section 7 rights.”)
[4] 365 NLRB No. 154 (2017).
[5] The administrative law judge previously applied the now overturned Boeing Co. balancing test to determine that the challenged Stericycle policies are unlawful under Section 8(a)(1) of the Act.
This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice. Always consult an attorney with specific legal issues.
