On August 2, 2023, the National Labor Relations Board reversed precedent on the issue of work rules that proscribe employee personal conduct. In Stericycle, the Board reversed and remanded an ALJ’s decision that found the employer violated Section 8(a)(1) by maintaining work rules addressing personal conduct, conflict of interest, and confidentiality of harassment complaints. In ruling against the employer, the ALJ had applied the standard established in Boeing Co 365 NLRB No. 154 (2017). The Boeing rule required the evaluation and balancing of two factors: 1) the extent of the potential impact on NLRA rights; and 2) legitimate justifications associated with the rule. The current Board determined that the Boeing balancing test gave too much weight to the employer’s interest.
Under the new rule, the General Counsel bears the burden of determining the rule is presumptively unlawful. The employer then bears the burden of 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 policy.
The Stericycle rule is open to very broad application. Many employers have expressed concern that their handbooks need to be substantially revised. This practitioner views the issue differently. It is true that the Board’s use of the term “employee personal conduct” is likely to encompass the vast majority of your policies that could lead to employee discipline. An employer could decide to add a business justification to each of its policies, but doing so would not necessarily solve the problem. The current NLRB General Counsel has proven to be quite the pro-union activist. Placing the business rationale in your policies will likely give her more ammunition to find a policy presumptively unlawful. In addition, it may constrain an employer’s ability to rebut the presumption of illegality by limiting the arguments used for making a business case for the rule to those stated in the policy.
So, what is an employer to do? We recommend you consider the business case for the rules you have in place and consider eliminating those policies that have no business purpose. The Board may offer guidance on how or if policies should be modified. Until then, employers should exercise caution on issuing discipline based on any rule that may be affected by the Stericycle decision. Seek advice of counsel before issuing discipline to employees, especially in instances where employer is facing a union organizing campaign.
Some examples of policies that will likely need to be reviewed are as follows:
- Restricting employee’s use of social media
- Restricting criticisms, negative comments, and disparagement of the company’s management, products or services.
- Promoting civility
- Prohibiting insubordination
- Requiring confidentiality of investigation of complaints
- Restricting behaviors such as using cameras or recording devices in the workplace
- Outlining rules for safety complaints
- Restructuring the use of company communications resources such as email
- Limiting the recordings or the use of smart phones or other devices
- Restricting meetings with co-workers or the circulation of petitions
- Limiting comments to the media or government agencies
These are simply examples of rules that might be affected by this recent decision. It remains to be seen how broadly the Board will apply the Stericycle rule. If you have questions, please contact a member of the McNees Labor & Employment group.