NLRB Adopts New Legal Standard for Evaluating Employer Work Rules

In Stericycle Inc., 372 NLRB No. 113 (2023), the National Labor Relations Board established a new union-friendly standard for evaluating employer handbooks and work rules. Under the new standard, the Board must analyze whether the work rule has a reasonable tendency to chill employees from engaging in protected union-related activities. In doing so, the Board first must interpret the work rule from “the perspective of the reasonable employee who is economically dependent on her employer” and who is contemplating how the rule might impact their protected rights.

If the Board finds the work rule to be unlawful, then the employer may rebut the presumption by “proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule.” This is a case-by-case approach, which requires an examination of the specific language of a particular rule and the employer’s legitimate reasons for maintaining the rule. The employer’s subjective intent is irrelevant.

This new standard overrules the prior anti-union standard that allowed for a categorical system, which often resulted in the umbrella approval of overbroad work rules and did not give enough weight to workers’ fears that engaging in protected union-related activity could violate the employer’s rules. By emphasizing that the perspective of a worker be considered and that the work rule be narrowly tailored to serve the employer’s legitimate interests, this new standard is a huge victory for workers’ rights.

The Stericycle decision overrules Boeing Co. (2017), which was later refined in LA Specialty Produce Co. (2019). The new standard builds on and revises the Lutheran Heritage Village-Livonia (2004) standard.

For more information on this decision, please contact your labor law counsel.

By Norey Lee Navarro