Earlier this week, the National Labor Relations Board (“NLRB” or “Board”) overturned established precedent and held that a facially neutral work rule is presumptively unlawful if a “reasonable” employee predisposed to engaging in protected concerted activity could interpret the rule to have a “coercive meaning.” Stericycle, Inc., 372 NLRB No. 113 (August 2, 2023). Assuming the General Counsel makes this modest showing, which the dissent correctly notes is an extremely low bar to clear, the employer may rebut this presumption by proving that the rule “advances legitimate and substantial business interests that cannot be achieved by a more narrowly tailored rule.” Whether any employer can meet this burden – which for all practical purposes amounts to a “strict scrutiny” analysis – remains to be seen.
For context, more than eight years ago, in February 2015, the employer in Stericycle, Inc. distributed a revised employee handbook to its employees, which included a rule restricting the use of personal electronic devices to break times only. The union filed unfair labor practice charges, and the General Counsel issued a complaint under the theory that the rule unlawfully infringed on employees’ Section 7 rights. The Administrative Law Judge disagreed, and held that any impact on Section 7 activity was outweighed by the employer’s desire to ensure employees did not use their cell phones in hazardous work areas. The General Counsel appealed the ALJ’s decision to the Board, and argued, among other things, that the Board’s then-current framework – which deemed a given rule lawful where its potential impact on Section 7 rights was outweighed by the employer’s business justifications – should be thrown out and replaced with a more employee-friendly standard.
To say the Board accepted the General Counsel’s invitation would be an understatement. The highlights of this decision include:
A facially neutral work rule is presumed to be unlawful where the General Counsel makes a showing that it has a reasonable tendency to chill employees’ exercise of their Section 7 rights.
Whether the rule has a “tendency” to do so will be viewed from the perspective of an employee who is predisposed to engaging in protected concerted activity, not any other regular employee.
The employer’s intention in maintaining a rule is immaterial.
To the extent the rule is ambiguous, the rule will be interpreted against the drafter (i.e., employer).
To rebut the General Counsel’s presumption, the employer must prove that legitimate and substantial business interests support the rule, and those interests cannot be achieved through less restrictive means.
While the Board majority takes pains to argue that this new framework is in line with prior Board decisions, that is simply not true: never before has the Board held that a given rule must be interpreted from the viewpoint of an employee who intends to engage in Section 7 activity. Instead, for 85 years the Board has considered the impact of a rule from the perspective of a “reasonable employee.” This appears to be a significant change: it is hard to envision a work rule that could not be interpreted to infringe on employees’ Section 7 rights in some form or fashion when viewed from the perspective of an employee who contemplates engaging in Section 7 activity.
It is important to note that this decision applies retroactively. Because of that, there is a possibility that a host of work rules or policies that were once lawful are not anymore. These include policies addressing social media, audio and video recordings at work, email use, distribution and solicitation, and bulletin boards, among many others. It is recommended that employers take this opportunity to review their rules and policies to determine whether they are both narrowly tailored and backed by legitimate business justifications.
Employers with questions about this ruling should consult with their Seyfarth attorney.