The National Labor Relations Board (NLRB) has delivered yet another major labor law development for 2023. Yesterday, the Board issued its decision in Stericycle, Inc., which overruled its own 2017 decision in Boeing Co. The decision adopts a new legal standard for challenging facially unlawful work rules under Section 8(a)(1) of the National Labor Relations Act (NLRA).
Boeing Co. was one of the major Trump-era NLRB decisions and sought to balance employee rights to engage in protected concerted activity—organizing, bargaining collectively, engaging in other activities for mutual aid and protection—and an employer’s right to maintain productivity and discipline in its workplace. Boeing Co. divided work rules into three categories: (1) those that were generally lawful to maintain; (2) those that warranted individualized scrutiny; and (3) those that were unlawful to maintain.
In overturning Boeing Co., however, NLRB Chair Lauren McFerran stated in a press release that the problem with Boeing Co. was that it “gave too little consideration to the chilling effect that work rules can have on workers’ Section 7 rights.” Accordingly, the new standard requires the General Counsel for the NLRB to prove that the challenged work rule has a reasonable tendency to chill employees from exercising their protected rights. If the General Counsel meets that burden, then the rule is presumed unlawful. An employer may then rebut that presumption by showing a legitimate and substantial business interest and that the employer is unable to advance that interest by a more narrowly tailored rule. Notably, this new standard will be interpreted from the perspective of the employee:
We clarify that the Board 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. 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.
Stericycle, Inc., 372 NLRB No. 113 at 2.
This decision completely flips the script for employers. Under this new standard, work rules that have any potential for ambiguity in the mind of an employee may be subject to challenge. Reasonableness (or unreasonableness) is now in the eye of the beholder through the lens of a pro-labor perspective. Therefore, employers should certainly expect more scrutiny from the NLRB regarding their work rules.
To stay up-to-date on this and more labor law developments, please contact a member of the Jackson Kelly Labor and Employment Team.