Handbooks Need Revision Following NLRB Ruling

Many employer handbooks and policies likely should be reviewed and revised following a landmark Aug. 2 ruling by the National Labor Relations Board (NLRB), Stericycle.

“This ruling, in a word, is huge,” said David Pryzbylski, an attorney with Barnes & Thornburg in Indianapolis. “This decision may invalidate countless workplace rules maintained by private-sector employers—whether they are unionized or not. It applies to all companies covered by the National Labor Relations Act [NLRA], which is the vast majority of employers in America.”

The NLRA does not apply to federal or state governmental units, railroads or airlines.

Employers need to create documentary evidence of the justification for their work rules before an unfair labor practice charge is filed, recommended Harry Johnson III, an attorney with Morgan Lewis in Los Angeles and former NLRB member.

New Standard

In Stericycle, an administrative law judge found that the employer violated the NLRA by maintaining certain rules for its employees that addressed personal conduct, conflicts of interest and confidentiality of harassment complaints. The NLRB announced a new standard for whether work rules violate the NLRA and sent the case back to the judge to consider the ruling in light of the new standard.

Under that standard, if an employee could reasonably interpret the work rule to have a coercive meaning, the NLRB general counsel would have met her burden to prove that the rule has a reasonable tendency to chill employees from exercising their NLRA rights. The general counsel, currently Jennifer Abruzzo, is independent from the board and responsible for the investigation and prosecution of unfair labor practice cases under the NLRA.

The employer’s intent in maintaining a work rule is immaterial, the NLRB wrote. The board instead clarified it will interpret the rule from the perspective of an employee who is subject to the policy, economically dependent on the employer and contemplates engaging in protected concerted activity.

Concerted activity includes talking with one or more co-workers about wages and benefits or other working conditions, circulating a petition asking for better hours, participating in a concerted refusal to work in unsafe conditions, openly talking about pay and benefits, and joining with co-workers to talk directly to the employer, an agency or the media about problems in the workplace, according to the NLRB.

It’s hard to imagine the general counsel won’t be able to prove that a rule has a reasonable tendency to chill employees from exercising their NLRA rights, said Phil Wilson, president and general counsel with the Labor Relations Institute, a labor and employee relations consulting firm in Broken Arrow, Okla.

If the general counsel provides such proof, the rule is presumptively unlawful. However, the employer may counter the presumption by proving that the rule advances a legitimate and substantial business interest and that the employer can’t advance that interest with a more narrowly tailored rule. If the employer proves this, the work rule will be found lawful.

However, “with little actual guidance about the meaning of the phrases above, needless to say, it is an incredibly uphill battle if an employer finds itself trying to rebut the presumption,” said Jason Reisman, an attorney with Blank Rome in Philadelphia.

In addition, the Stericycle opinion discarded previous NLRB decisions holding that certain types of policies were inherently lawful, regardless of the precise language in which the policy is expressed, in favor of evaluation of each challenged policy on a case-by-case basis, said Peter Spanos, an attorney with Taylor English Duma in Atlanta. Policies that are no longer deemed by the board always lawful to maintain are investigative-confidentiality rules, nondisparagement rules and rules prohibiting outside employment.   

“Employee handbooks and policies that were adopted or revised based on prior guidance from the NLRB may now be subject to challenge,” he said.

The decision probably will be appealed. The appellate process can take many months or even years, Pryzbylski added. “In the meantime, the board will be enforcing this new standard, so employers face the risk of having their policies invalidated if they do not revisit them to ensure they are drafted in a compliant manner,” he said. “To the extent they are found to have unlawful rules, it could result in backpay awards in the event an employee is terminated pursuant to such a rule, have negative effects on a union election outcome, as well as other penalties.”

Plus, in most cases, the NLRB does not follow a federal appeals court ruling outside of that court’s jurisdiction until the Supreme Court weighs in, if it does. “So, that may favor companies taking a fresh look at their policies sooner rather than later,” Pryzbylski said.

Employer Policy Implications

Examples of policies that likely need to be reviewed and rewritten to be aligned with the new board standard, according to Spanos, include work rules:

• Restricting employees’ use of social media.
• Restricting criticism, negative comments, and disparagement of the company’s management, products, or services.
• Promoting civility.
• Prohibiting insubordination.
• Requiring confidentiality of investigations and complaints.
• Restricting behaviors such as using cameras or recording devices in the workplace.
• Outlining rules for safety complaints.
• Restricting the use of company communication resources, such as email or Slack.
• Limiting the recording of meetings or the use of smartphones or other devices.
• Restricting meetings with co-workers or the circulation of petitions.
• Limiting comments to the media or government agencies.

All HR professionals should work with their labor counsel to audit current employment policies for compliance with the new standard and to keep up-to-date on board decisions that will apply the Stericycle standard in coming months.

The bottom line is that many policies will be under new and intense scrutiny by the NLRB, and employers should be aware of the new standard and review and update their policies accordingly.