Revise Employee Handbooks. From Dan Rogers, Attorney at DAVIS GRIMM PAYNE & MARRA

Dan Rogers, Attorney https://www.davisgrimmpayne.com/

Employers will need to take a close look at Employee Handbooks and Workplace Policies to ensure they are lawful following a ruling of the National Labor Relations Board (“NLRB”) this summer. On August 2, 2023, the NLRB issued its decision in Stericycle Inc. This decision alters the standard under which a handbook or employer policy violates employees’ rights under the National Labor Relations Act (“NLRA”). Stericycle overrules the Board’s 2017 decision in Boeing Co. and reverts the standard to one more closely in line with an even earlier decision on this issue, Lutheran Heritage Village-Livonia in 2004. 

How We Got Here 

Lutheran Heritage held an employer’s rule violated an employee’s rights under the NLRA if an employee could “reasonably construe” the rule as preventing the exercise of Section 7 rights, such as, by limiting employees’ ability to take collective action. Boeing overruled Lutheran Heritage and created a more employer friendly balancing test that emphasized an employer’s overly broad rule was not a per se violation of the NLRA. 

Where We Are Now 

Stericycle wiped away the Boeing standard and returned to Lutheran Heritage with an important difference. Stericycle creates a rebuttable presumption that an employer’s rule is unlawful if the employee can show the rule has a reasonable tendency to chill employees from exercising their rights. Once established, the employer can rebut the presumption of illegality only by proving that its rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule. This change creates considerable difficulty and risk for employers. 

The Upshot 

The immediate result of this decision is that employers now face a greater risk of being charged with unfair labor practices. Companies or industries that are unionized or are experiencing new union campaigns are particularly vulnerable. Part of the difficulty caused by the Stericycle standard is the lack of clarity on what the NLRB sees as a “legitimate and substantial” business interest. 

What You Can Do Now 

Employers can take affirmative steps to shield themselves from liability by reevaluating employee handbooks and policies with an eye towards reducing vagueness. Unclear or vague rules create uncertainty on the part of employees, which are more likely to prevent an employee from taking protected action. Rules or policies regarding non-disparagement and confidentiality should be closely scrutinized. We encourage employers to seek counsel and guidance on this issue to adapt to the shifting landscape in this area of the law.