NLRB Changes Course on Employee Handbooks

The National Labor Relations Board issued a decision August 2 that establishes a new standard for evaluating employer handbook policies and rules.

The latest ruling reverses the board’s 2017 Boeing Co. decision that provided greater flexibility for employer policies and also overturned clarifying opinions, including Apogee Retail, that followed Boeing.

NLRB officials said the Stericycle Inc. decision adopts “a new legal standard for evaluating employer work rules challenged as facially unlawful under Section 8(a)(1) of the National Labor Relations Act.”

The board’s decision notes that it “will interpret the rule 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.”

“Consistent with this perspective, the employer’s intent in maintaining a rule is immaterial,” the decision notes.

“Rather, if an employee could reasonably interpret the rule to have a coercive meaning, the general counsel will carry her burden, even if a contrary, noncoercive interpretation of the rule is also reasonable.”

Tilting the Balance

The NLRB’s 2017 Boeing decision represented a balancing test that considered the nature and extent of a policy’s potential impact on NLRA rights and the employer’s legitimate justifications.

That standard was widely regarded as a commonsense approach to evaluating the impact of work rules on employee rights under the NLRA.

🧵: Today, the NLRB issued a decision in Stericycle Inc., adopting a new legal standard for evaluating whether an employer work rule is unlawful to maintain under the National Labor Relations Act.https://t.co/WKmgJTvr2L pic.twitter.com/fxa9S3HPty

— NLRB (@NLRB) August 2, 2023

However, in a statement released following the Stericycle decision, NLRB chair Lauren McFerran said “Boeing gave too little consideration to the chilling effect that work rules can have on workers’ Section 7 rights.”

“Under the new standard, the board will carefully consider both the potential impact of work rules on employees and the interests that employers articulate in support of their rules,” she said.

“By requiring employers to narrowly tailor their rules to serve those interests, the board will better support the policies of the National Labor Relations Act.”

Retroactive

The new standard is retroactive and applies not only to new workplace policies, but to existing employer policies.

The board adopted the ruling on a 3-1 vote, with Marvin Kaplan dissenting, noting that “a work rule is presumptively unlawful to maintain if an employee could reasonably interpret it to have a coercive meaning.”

“The standard my colleagues announce today does not measure up.”

NLRB member Marvin Kaplan

“A challenged rule will be found presumptively unlawful without any consideration of the legitimate employer interests it advances,” he said.

“The standard my colleagues announce today does not measure up. It gives effectively dispositive weight to the employee rights side of the balance.”

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What is the practical implication for your company’s handbook? CBIA HR counsel Diane Mokriski explains.