NLRB’s Strict Decision on Work Rules Remains in Place

Employers hoping for relief from the National Labor Relations Board’s (NLRB’s) employee-friendly burden-shifting process to determine if work rules violate the National Labor Relations Act (NLRA) will have to wait. The 2023 NLRB decision of Stericycle remains intact, and whether it will be overturned, though seemingly likely, remains uncertain.

HR Q&A: Understanding NLRA Compliance

Background

In Stericycle, “the board established a new burden-shifting process for determining whether employer work rules or policies unlawfully restrict employees’ protected concerted activity under Section 7 of the NLRA,” said Tom Luetkemeyer, an attorney with Hinshaw in Chicago.  

The board’s general counsel first must show that the challenged work rule has a reasonable tendency to chill employees from exercising their Section 7 rights, Luetkemeyer explained. Once the general counsel makes that showing, the rule is presumptively unlawful.  

The employer can rebut the presumption by proving the rule advances a legitimate and substantial business interest that the employer is unable to advance with a more narrowly tailored rule. 

“The board has imposed a significant evidentiary burden on employers,” Luetkemeyer said. “While the words of the burden-shifting test of Stericycle give the employer a chance, it will be extremely difficult to prevail, as an employer has to essentially prove that an alternative and more narrow policy will not only satisfy the burden of proof but also satisfy the board. Even policies laden with disclaimers might not suffice.”

The end result of Stericycle is that all workplace policies are broadly subject to legal challenge based on whether an employee could reasonably interpret restriction of their rights, and there are effectively no safe harbors, said Chris Foster, an attorney with McDermott Will & Schulte in San Francisco. 

Might the Decision Be Overturned? 

The overturning of Stericycle isn’t likely until there are three Republican-appointed members in place on the board, Foster said. “The courts of appeal are poised to invalidate sooner.”

It’s possible, but historically unlikely, that the two Republican-appointed board members will overrule major Biden-era board precedent by issuing decisions with only a two-member majority, he said.

But the current and sole Democrat-appointed member’s term expires this August, Foster added. “If replacement isn’t quickly made, the board will again be unable to issue decisions with only two members.” 
The courts of appeal and Supreme Court will be the most likely paths of major changes in labor law, he predicted. 

“However, the new NLRB general counsel is already making major changes to how existing law is investigated and enforced, at the critical intake stage,” Foster said. “This is huge, because the NLRB general counsel has broad discretion on which cases to pursue or not.”

In a recent memo, the general counsel told NLRB regional offices to be more selective in work rule cases.

Related Article: What HR Professionals Should Know About the NLRB

Draft Work Rules Narrowly

HR professionals seeking to comply with Stericycle should, despite its possible overturning in the future, narrowly tailor workplace rules and policies to maximize enforceability, without compromising on operational flexibility and needs, Foster said. “Avoid overbroad rules by adding examples in policies, and perform a practical, not academic, risk-benefit analysis under legal privilege on making preemptive changes.”

While it is likely that Stericycle will be overturned during President Donald Trump’s presidency, it is not a given and it remains good law, Luetkemeyer said.

“Therefore, employers will have the difficult hurdle of proving that the rule not only advances a legitimate and substantial business interest, but that the same purpose couldn’t be achieved with a more narrow policy,” he said. “It is that last component of the employer’s burden of proof that has proven problematic.”