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Handbooks and Policies - Time to Revise Them After NLRB Ruling, or Another Pendulum Swing?

By: Rosalee McNamara

Submitted by Firm:
Lathrop GPM LLP - Minnesota
Firm Contacts:
Kathryn M. Nash, Mark S. Mathison, Megan Anderson
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The answer after the Stericycle ruling is likely “both.” 

As the composition of the NLRB (National Labor Relations Board) changes, the roller coaster continues, making it difficult for businesses – whether private, non-profit, non-union or union and beyond – to draft and implement compliant policies, reduce risk, conduct or oversee investigations, and more. The result of this swing will likely be more confusion for all employees – union or not – as to whether common policies actually comply with the law, and more litigation involving employees who are disciplined for policy violations.

Earlier this month NLRB issued its landmark ruling in Stericycle, Inc., significantly impacting the standard for lawfulness of facially neutral work rules under section 8(a)(1) of the NLRA (National Labor Relations Act).

The NLRB’s ruling overruled its own prior decision in The Boeing Company (2017), in which the NLRB endorsed the use of rule categories to determine the lawfulness of work rules. 

This time, the Board “decided to adopt an approach to assessing facial challenges to employer work rules under Section 8(a)(1) that builds on and revises the Lutheran Heritage standard,” adopting a modified (arguably broader) version of the framework set forth in Lutheran Heritage back in 2004.  The Board noted that Lutheran Heritage “recognized that overbroad workplace rules and polices may chill employees in the exercise of their Section 7 rights and properly focused the Board’s inquiry on NLRA-protected rights.”

The NLRB said it is returning to a case-specific approach and said the proper approach is for the Board to examine “the specific wording of the rule, the specific industry and workplace context in which it is maintained, the specific employer interests it may advance, and the specific statutory rights in may infringe upon.”  [“In order to consider all important aspects of the problem posed by potentially overbroad work rules, the Board should examine the specific wording of the rule, the specific industry and workplace context in which it is maintained, the specific employer interests it may advance, and the specific statutory rights it may infringe.”]

In evaluating potential violations,

  • First, The NLRB (General Counsel) assesses whether the challenged work rule “has a reasonable tendency to chill employees from exercising their [NLRA] Section 7 rights”, or said differently, whether “an employee could reasonably interpret the rule to have a coercive meaning.” This burden will be deemed satisfied “even if a contrary, noncoercive (or non-chilling) interpretation of the rule is also reasonable.”  [Thus, if an employee could reasonably interpret the work rule to have a coercive meaning, the NLRB General Counsel would have met the burden to prove that the rule has a reasonable tendency to chill employees from exercising their NLRA rights.]
  • Then, the employer can rebut the presumption of illegality by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest using a more narrowly tailored work rule.

The new legal standard makes it easier for employees – whether union employees or not - to challenge work rules and policies that can reasonably be interpreted to restrict their Section 7 rights to engage in protected activity. 

Importantly, the new legal standard is retroactive

The Board said its new decision remedies the fundamental defects in Boeing’s failure to require the employer to “narrowly tailor its rules to only promote its legitimate and substantial business interests while avoiding burdening employee rights.”

As noted by the dissent in Stericycle, under the new standard “a challenged rule will be found presumptively unlawful …if an employee could reasonably interpret [it] to have a coercive meaning … without any consideration of the legitimate employer interests it advances.” 

Employers need to act now, to review handbook policies in light of the Stericycle landmark decision and its retroactive application. 

Some practical tips include: 

We have long counseled against using words like the conclusory term “insubordination”, vs. facts clearly supporting the discipline or termination.  The NLRB could find that an employee “reasonably” interpreted “insubordination” as “chilling.”

Some questions to ask yourself:

  • Do our handbook or other employee policies implicate employees’ Section 7 rights?
  • What are the important business interests advanced by these policies?
  • Should the policies be more narrowly tailored under Stericycle?
  • Are there good reasons we can document – now, before a challenge or NLRB charge – justifying from a business perspective, based on experience and past incidents, the need for work rules and policies that may be subject to challenge, including those above?

What are our critical policies?  Abide by respectful workplace policies, such as:

  • Respect in the workplace
  • Non-Discrimination
  • Non-Violence
  • No conflicts of interest

Expect new challenges to other policies, such as:

  • Workplace conduct, standards of conduct, work rules and disciplinary rules
  • Confidentiality (including confidentiality of workplace investigations for the duration of the investigation) esp. non-supervisors
  • Non-disparagement
  • Non-solicitation and non-distribution
  • Social media, and other media policies (e.g. restricting comments to the media/ government agencies)
  • Audio/ Video Recording, and Photographs
  • Cell phones in the workplace
  • Computer/ Technology (including restrictions on use of company communications and resources)
  • Appearance/ dress code
  • Anti-harassment
  • Open door/ complaints

https://apps.nlrb.gov/link/document.aspx/09031d4583af43bd 

https://www.nlrb.gov/news-outreach/news-story/board-adopts-new-standard-for-assessing-lawfulness-of-work-rules

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