Don't Panic. Remain Calm. What to Know about the NLRB's New Standard of Review for Employment Policies

Last week, the National Labor Relations Board adopted a new legal standard for evaluating employer work rules challenged as facially unlawful under Section 8(a)(1) of the National Labor Relations Act.  In Stericycle Inc., the Board overruled Boeing Co. (2017) and its progeny, pro-employer decisions issued during the Trump administration. 

In Stericycle, the Board explained that the primary problem with the Boeing standard was that it permitted employers to adopt overbroad work rules that chill employees’ exercise of their rights under Section 7 of the Act (e.g., the right to engage in protected concerted activities).  Under that standard, an employer was not required to narrowly tailor its rules to promote its legitimate and substantial business interests without unnecessarily burdening employee rights.  The Board also rejected Boeing’s categorical approach to work rules, under which certain types of rules (harassment, insubordination, safety, etc.) were held to be always lawful, regardless of how they were drafted or what interests a particular employer cited in defense of the rule.

Under the new standard adopted in Stericycle, the NLRB’s General Counsel must prove that a challenged rule has a reasonable tendency to chill employees from exercising their rights.  If the NLRB’s General Counsel does so, then the rule is presumptively unlawful.  The employer, however, may rebut the presumption by proving 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.  If the employer proves its defense, then the work rule will be found lawful to maintain.  In line with this framework, the Board rejected the categorical approach of Boeing in favor of case-specific consideration of work rules.

In response to the Board’s decision in Stericycle, the internet has been abuzz with “sky is falling” proclamations and warnings from purported labor and employment experts throughout the country.  All employers have been instructed to immediately review and revise Employee Handbooks, Manuals, and related employment policies.  While it would be prudent to review critical employment policies at this time, there is no need to panic or make impulsive decisions regarding your Handbooks and/or employment policies.

As an initial matter, although all employers will be impacted by the NLRB’s new standard (not just unionized employers), the likelihood of having NLRB problems because of the Stericycle decision is remote.  In the event that a particular policy is challenged by an employee, a union, or the Board, the most likely outcome will be the need to revise the policy at that time if the Board determines that it is overbroad.  Provided that no employee has suffered an adverse employment action because of the overbroad policy, the remedy will simply be policy revision and posting. 

More importantly, it is very possible that the Stericycle standard may have a short life span.  This decision will assuredly be appealed by the employer (or its application to another employer will be appealed).  At some point soon, the courts will weigh in on the appropriateness of the Board’s new standard for employment policies.  To the extent that federal courts render conflicting decisions in this regard (which is also likely), the issue will eventually be addressed by the United States Supreme Court.  Based upon the existing composition of the Court, the likelihood that this restrictive standard is upheld is far from certain. 

Finally, the NLRB, more than any other government agency, is a political animal.  Not surprisingly, when the Democrats control the White House and appoint the members of the NLRB, the Board will generally issue pro-employee/pro-union decisions.  On the other hand, when the Republicans control the White House and appoint members of the NLRB, the Board will issue pro-employer decisions.   As such, as with all “landmark” NLRB decisions, this one is likely to be quickly overturned in the event of an administration change in November of 2024.

For now, don’t panic.  Don’t jump blindly off a cliff and revise your entire Handbook because you are worried that the NLRB will be showing up at your door.  A much more tempered and measured response would be appropriate under the circumstances.  Your best friend should always be your trusted labor and employment law counsel (whoever that may be).  Reach out to that person and let he/she provide you with recommendations regarding your Handbook and employment policies.  You may be surprised to find that a complete re-write of your Handbook is not necessary at this time!

Should you have any questions regarding the Stericycle decision, your Employee Handbook, or any employment policies, the attorneys at Hoffman & Hlavac are here to help you. To stay updated on key labor and employment law developments that affect your workplace, be sure to subscribe to this blog and follow us on social media!