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NLRB Toughens Standard for Work Rules

on Thursday, 17 August 2023 in Labor & Employment Law Update: Sarah M. Huyck, Editor

On August 2, 2023, in yet another pendulum swing for distinguishing what is legal versus illegal, the National Labor Relations Board announced a new standard for evaluating work rules.[1]  According to the Board, its former standard “permits employers to adopt overbroad work rules that chill employees’ … rights,” and “gives too much weight to employer interests.” The former standard was announced by the Board in 2017.[2]

Now, work rules will be presumptively unlawful “If an employee could reasonably interpret the rule to have a coercive meaning… even if a contrary, noncoercive interpretation of the rule is also reasonable.” Note the emphasis on employees’ subjective state of mind.  If employees “could” interpret a rule as restricting protected activity (i.e., union organizing, protests, criticism of employers), it will be presumed to be unlawful.  That presumption will apply even when a non-coercive interpretation is also reasonable, or when the rule was never enforced to restrict protected activity.  

How can employers defend policies that employees “could” interpret as restricting their rights?  Under the new standard, employers must prove the policy “advances legitimate and substantial business interests that cannot be achieved by a more narrowly tailored rule.” One Board member strongly disagreed with the new standard, explaining that an employer’s defense to a presumptively unlawful rule “will rarely if ever be established.”

What about policies that were published in reliance upon the Board’s former standard?  According to the Board, “retroactive application of the new work-rules standard will not cause manifest injustice,” because “the parties have not had an extended time to rely on” the old standard.  The Board further clarified that the new “case-by-case approach will not sacrifice clarity and predictability…”  The Board also declared that “We impose no unreasonable burden on employers by expecting them to be aware of their employees’ rights…”

Employers should anticipate more Board decisions finding work rule violations on a wide range of policies, including no-recording rules, confidentiality, non-disparagement and civility rules, search of employee property, and cell phones in work areas.  Those policies were categorically lawful under the old Board standard, and will likely be viewed as presumptively unlawful under the new standard.

[1]  Stericycle, Inc. 372 NLRB No. 113 (August 2, 2023).

[2] Boeing Co., 365 NLRB No. 154 (2017); further clarified in LA Specialty Produce Co., 368 NLRB No. 93 (2019)

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