Client Alert: NLRB Stericycle Decision Brings Heightened Scrutiny to Employment Work Rules and Policies

On August 2, 2023, the National Labor Relations Board (“NLRB”) issued a decision in Stericycle that will bring heightened scrutiny to employers’ work rules and policies and their potential impact on employees’ rights to self-organize under Section 7 of the National Labor Relations Act (“NLRA”).

Impacts for Employers

Overruling earlier decisions (Boeing (2017) and LA Specialty Produce (2019)), the NLRB rejected the balancing test employed in those cases to evaluate facially neutral work rules and policies (e.g., rules against audio and video recording, confidentiality rules for proprietary information, social media and non-disparagement restrictions), finding them categorically lawful. The NLRB will return to a case-by-case approach and adopt a modified version of the standard articulated in the 2004 Lutheran Heritage decision. 

The NLRB’s general counsel will now evaluate the potential impact of an employers’ rules and policies on employees’ Section 7 rights “from the perspective of an employee who is subject to the rule and economically dependent on the employer, and who also contemplates engaging in protected concerted activity.” In an unfair labor practice hearing, the general counsel will be able to establish that an employers’ rule or policy is presumptively unlawful by showing that an employee who is dependent on continued employment could “reasonably interpret” that the employer’s rule or policy restricts the employee’s ability to engage in Section 7 protected activity.

Once the general counsel establishes that an employer’s rule or policy has a “tendency” to suppress protected activity, the employer must show that the rule is narrowly tailored to advance legitimate and substantial business interests and that those interests cannot be preserved with any narrower rule or policy. Stericycle provides that any rule or policy found to have any tendency to restrict Section 7 rights remains unlawful if “it could be narrowed to lessen the infringement of employees’ statutory rights while still advancing the employer’s interest…,” and any vague or ambiguous rule or policy will be construed against the employer.

By way of example, Stericycle rejected the holding in Boeing that an employer’s prohibition on video recording at its facilities was lawful because The Boeing Company, a major government contractor, handled information and materials that were classified by the Department of Defense. The NLRB now suggests that a far narrower restriction—tailored to events or portions of facilities where classified information or materials might be present—is capable of satisfying the employer’s business needs while still preserving employees’ ability to otherwise use cellphone video recording within their Section 7 rights.

Why This Decision Matters

Stericycle expressly states that the new standard applies retroactively, and it suggests that an employee handbook containing a broad Section 7 disclaimer—that no rule is intended to restrict employees’ rights to engage in protected activity—is not sufficient to satisfy the new standard. With the NLRB’s return to a case-by-case approach, additional decisions issued over the coming months and years presumably will provide clarification on the Stericycle standard and how employers can craft narrowly tailored NLRA-compliant rules.

We recommend that employers review their employee handbooks and policies for compliance with the Stericycle decision.

How We Can Help 

Glaser Weil’s Employment Practice Group is well-suited to evaluate compliance with Stericycle and to offer a number of tailored solutions to efficiently address its numerous implications. Please reach out for more information.