US: NLRB Poised to Revise Workplace Rules Test

In time with the political pendulum of the National Labor Relations Board (“NLRB”), the NLRB is poised to revisit the legality of many standard work rules in employee handbooks.

In January, the NLRB advised it was considering revising its approach to analyzing the legality of work rules in the case Stericycle Inc., 371 NLRB No. 48, and it invited interested parties and amici to submit their positions. These briefs were due on March 7, and it is therefore anticipated that the NLRB will issue a revised standard in the coming months.

How the pendulum swings

The NLRB is governed by a five-member Board, which acts as a quasi-judicial body in deciding cases and providing interpretations of the National Labor Relations Act (“NLRA”). Board members are appointed by the President for 5-year terms. The initiatives and direction of the NLRB shifts when the political makeup of the NLRB shifts – specifically, when the Board majority shifts from Democrat to Republican and vice-versa.  The Board shifted to a Democrat-majority in August 2021.

Under the last Democrat-majority Board during the Obama Administration, the NLRB aggressively policed handbook policies that it felt were overbroad and could chill employee rights. Under Section 7 of the NLRA, an employer cannot restrain or coerce employees in the exercise of their rights, which include the right to form a union, the right to bargain, and the right to join together in other ways for mutual aid or protection. The previous Democrat-majority board found that many common employee handbook provisions infringed on this right. For example, the following policies, among many, were deemed unlawful:

• A policy prohibiting “offensive” conduct towards patients or co-workers.
• A policy prohibiting conduct that “impedes harmonious interactions and relationships.”
• A policy stating “be respectful of others and the Company.”

The Board deemed these rules unlawful because employees may need to be disrespectful to protest working conditions or unionize, and a blanket rule that employees must be civil or courteous could impede that right.  The previous Democrat-majority board also struck down many standard confidentiality policies and policies that restricted employees from sharing certain views with the media or other third parties.

When a Republican-majority Board took control of the NLRB during the Trump Administration, that Board significantly changed the approach to workplace rules in a 2017 decision involving the Boeing Company.  In short, the Republican-majority Board deemed most employment policies to be lawful on their face, but the Board focused on whether the policies were actually applied to discourage or prohibit union-related or protected Section 7 activity. Accordingly, many handbook policies that employers had removed from their handbooks were dusted off and returned.

Takeaways and Next Steps

We anticipate that the current Board will return to the previous Democrat-majority standard or something similar, and at that time, employers will once again need to review their current policies and consider whether any revisions are needed/appropriate to comply with the new standard.

We will provide a detailed update as soon as the Board issues its ruling in Stericycle.