The National Labor Relations Board (NLRB) recently issued a decision in the case of Stericycle, Inc. and Teamsters Local 628. This decision brings about a notable change in the legal criteria used to determine the legality of employment policies. Are your employment policies enforceable?

What is the NLRB?

The National Labor Relations Board was created by the National Labor Relations Act (NLRA) of 1935. We may now consider unions and collective bargaining to be commonplace, but before the NLRA was enacted, employee strikes were illegal and often brutally crushed by police or security.

While it’s commonly believed that collective bargaining can hamper businesses, Congress, in reality, enacted this law to enhance both the efficiency of the economy and the working conditions of employees. It turns out that massive strikes that can only be resolved by violence aren’t great for the economy!

The NLRA attempts to address the inequality of bargaining power between employees and employers. The Board prevents unfair labor practices and protects employees’ rights to organize and bargain collectively. These are known as “concerted activities” and are protected under Section 7 of the National Labor Relations Act (NLRA). Notably, both unionized and non-unionized employees have rights under Section 7.

Unpacking Stericycle, Inc. and Teamsters Local 628

The NLRB’s decision in Stericycle, Inc. and Teamsters Local 628 marks a reversal of two previous decisions made during the Trump era: Boeing Co. (2017) and LA Specialty Produce Co. (2019). These prior rulings had established a method in which employment policies that appeared unbiased on the surface were evaluated through a balancing test. The nature and extent of potential impacts on employees’ Section 7 rights were balanced against employers’ legitimate justifications for the rule.

The Stericycle decision overturns these precedents and introduces a new approach of evaluating policies on an individual basis. In Stericycle, the NLRB determined that the previous balancing test didn’t place enough weight behind the chilling effect that work rules can have on workers’ exercise of their rights. The Board noted that the previous test examined suspect work rules from the perspective of a more disinterested employee, one who might review and measure the effect of work rules as a lawyer would. This new rule recognizes that employees are economically dependent on their employers, and that they, as interested parties, might be more likely to refrain from exercising their Section 7 rights to avoid repercussions. People generally don’t want to risk their jobs by violating employer policies.

The effect of the Stericycle decision is that the NLRB general counsel only has to show that an employee could reasonably interpret the rule to have a chilling effect on their willingness to exercise their Section 7 rights. Once the GC does that, the rule being investigated becomes presumptively unlawful. At that point, the employer can rebut that presumption by showing both that (1) the rule promotes a legitimate and substantial business interest, and (2) the rule can’t be more narrowly tailored to accomplish the same thing.

Overcoming this unlawful presumption is a very high bar and it’s going to be difficult for employers to justify their overly broad policies that might have been enforceable under the previous standard.

TL;DR—This new framework is more protective of employee rights. The NLRB general counsel’s burden to show a rule is unlawful is now lower, and the bar is raised for employers to prove that their rules are necessary and sufficiently narrow.

What does this mean for employers?

Under Section 7 of the NLRA, employees have the right to discuss working conditions with colleagues, file complaints about unfair labor practices, and help others do the same. In light of this, employers are obligated to permit employees to communicate openly with external parties regarding their working conditions; any policy that dissuades employees from exercising these rights is deemed unlawful. Employers can not discharge, discipline, or threaten employees over exercising these rights—and they can not coercively question employees about their protected activities.

If a policy aligns with a valid business interest and is essential to uphold that interest, employers are advised to demonstrate its validity by meticulously documenting the rationale behind the implementation of the policy.

As with all rights, these employee rights are not unlimited. Employees can’t say whatever they want, however they want to. Employees can lose protection by saying or doing something egregiously offensive or saying or doing something knowingly and maliciously false. Employees can also lose protections by publicly disparaging their employer’s products or services if the complaints don’t relate to the terms and conditions of employment.

For example, an employer can prohibit an employee of a burger joint from posting on social media that the burgers at their place of employment taste bad, discouraging everyone from eating there. But it is within the employee’s Section 7 rights to post that the burger place is engaging in unfair work practices, and encourage a boycott until they improve their policies.

Update your policies

Employers should examine their company policies and consider revising them to better comply with this new standard.

When reevaluating policies, what analysis should companies be using? If a policy or work rule has the potential to reasonably discourage employees from exercising their Section 7 rights, it is considered presumptively unlawful. To be deemed unlawful, the policy doesn’t have to outright prevent employees from exercising their rights; it simply needs to create a sense of discouragement. It’s up to the employer to demonstrate that the policy serves a valid and significant business interest and that there is no narrower way to achieve those goals.

It would be a good idea to review the following policies, as well as any other policies that may touch on employee speech or communication:

  • Cell Phone Policy
  • Code of Conduct
  • Confidentiality Policy
  • Conflict of Interest Policy
  • Equal Employment Opportunity Policy
  • Employee Dating Policy
  • Exit Interview Policy
  • Pay Transparency Policy
  • Protected Activities Policy
  • Public Relations Policy
  • Outside Employment Policy
  • Social Media Policy

Employers may also choose to add disclaimers to these policies making clear that they are not intended to deny employees any rights under Section 7 of the NLRA. An effective disclaimer is specific. Make sure your employees know what their rights are and how to exercise them.

Unfortunately, the NLRB did not make a decision regarding the effectiveness of adding disclaimers to protect policies from legal challenges. Therefore, employers should still evaluate whether a policy is necessary to promote a legitimate business interest or if a more specific policy could achieve the same objective.

SixFifty can help

SixFifty helps companies create employment policies with the best legal expertise engine on the planet. All customized to your needs, and all with the highest quality legal language available.

SixFifty’s Employment Docs helps companies stay compliant with employment laws in all 50 states for the complete employee lifecycle—starting with research and hiring, through management and separation. Generate the most up-to-date employee handbook policies with SixFifty. When laws change or new rulings like Stericycle are enacted, you can update your handbook with the click of a button.

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