New Handbook Standard: National Labor Relations Board
The National Labor Relations Board (NLRB) released a new legal standard on August 2, 2023, for evaluating workplace rules under the National Labor Relations Act (NLRA). This new ruling requires employers to closely examine the language in their handbook policies and work rules to ensure the policies and rules are not overbroad and are not restricting employee rights.
Before we discuss what this new ruling means for employers, it may be helpful to provide a bit more information about which employers are subject to NLRA rules and what the NLRB does.
What is the NLRB?
The National Labor Relations Board (NLRB) is a federal entity in charge of enforcing the National Labor Relations Act (NLRA) and protecting worker rights. They can help with mediation between employees and employers when there is a disagreement over workplace conditions and/or wages, can investigate complaints against employers who are alleged to have interfered with employee exercising of their rights, and can be involved in union elections.
They also publish decisions and guidance following investigation of complaints that sets standards for all employers covered under the NLRA.
What is the NLRA?
The NLRA is a federal statute that provides the right to private sector employees to work to improve their working conditions by organizing into unions, participating in collective bargaining, and taking collective action – aka strikes. The NLRA is also known as the Wagner Act and has been in effect since 1935.
The intention of the law is to give employees control over their working conditions and wages as well as hold employers accountable for their actions and prohibit employers from retaliating against employees for exercising their rights under the NLRA.
As we should all be aware, Section 7 of the NLRA, gives employees the right to “self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection” and the right to “refrain from any or all such activities.”
Additionally, Section 8(a)(1) under the NLRA makes it an unfair labor practice for employers to “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7.”
Prohibited activities under the NLRA – Section 7 and 8(a)(1) Interfering with employee rights (Section 7 & 8(a)(1)) | National Labor Relations Board (nlrb.gov)
Who is covered under the NLRA?
The NLRB has jurisdiction over private sector employers including:
Retailers, with an annual volume of business of $500,000 or more;
Shopping centers and office buildings with business volume of $100,000 or more;
Non-retailers with an annual inflow/outflow of $50,000 or more;
Nursing homes and nursing associations – annual volume of $50,000 or more;
Hospitals, medical/dental offices, social service organizations, child care centers with gross annual volume of $250,000 or more;
Commercial enterprises owned by Native American tribes (either on or off of a reservation), but not those that perform traditional tribal or government functions;
Employers with federal government contracts;
Some religious institutions;
Transportation businesses with annual volume of $50,000 or more;
Law firms and legal service organizations with gross annual volume of $250,000 or more;
Cultural and Educational Centers (private schools, museums, etc.) with annual volume of $1,000,000 or more.
The following employers are NOT covered under the NLRB:
Federal, state, and local governments, including public schools, libraries, and parks, Federal Reserve banks, and wholly-owned government corporations.
Employers who employ only agricultural laborers, those engaged in farming operations that cultivate or harvest agricultural commodities or prepare commodities for delivery.
Employers subject to the Railway Labor Act, such as interstate railroads and airlines.
Supervisory employees are not covered under the NLRA, however, if the employer imposes adverse action against a supervisory employee for refusing to violate NLRA rights of employees, then they would be covered.
A common misconception is that if an employee is not part of a union, they are not covered under the NLRA. Instead, the NLRA provides protections to both unionized and non-unionized workers.
Why is this important to me?
The new standard on August 2, 2023, changes the NLRB investigation process when evaluating workplace rules under the NLRA. As a result of a complaint regarding workplace rules at Stericycle, Inc. and the subsequent investigation by the NLRB, a decision was made that overrules the previous guidance from 2017. The new decision can be found here: Stericycle, Inc., 372 NLRB No. 113 (2023), and the previous decision can be found here Boeing.
What does the Stericycle Standard do?
The new standard will heighten scrutiny of employer policies, including those in Handbooks and internal policies, to say that an employer policy or rule may be unlawful if it “could” rather than “would” be interpreted to restrict or limit employee rights in the workplace.
The NLRB will now use a two-step process to evaluate work rules that are brought before the board: (1) the NLRB’s General Counsel will have to prove that an employer’s policy or work rule “has a reasonable tendency to chill” or restrict employee’s exercise of their rights, and (2) the employer will have an opportunity to respond with proof that the policy or rule cannot be written more narrowly and still protect legitimate and substantial business interests.
The NLRB will be evaluating workplace rules “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.” Additionally, the NLRB explains that if a reasonable person would interpret a workplace rule to infringe or restrict employee rights under Section 7 of the NLRA, then the rule is considered unlawful – even if the rule can also be interpreted by the employer to not restrict employee rights. The recommended action is to evaluate rules and policies to ensure they are written so anyone can understand the intention of the rule, with plain and understandable language, and identify what business interests are being protected by the rule.
Employers should review policies and rules to ensure language is easily understandable by an ordinary employee, does not restrict employee rights under Section 7 and 8(a)(1) of the NLRA, and that any rules are in place to protect business interests only.
Recommended areas for review include, but are not limited to:
Use of employer technology and tools
Media and third-party disclosures
Solicitation and distribution rules
Dress code and personal appearance policies
Open Door and Internal Complaint policies
Disclosure of Confidential Information
What does this mean for employers?
As the NLRB will be looking more closely at workplace rules, employers must make sure their employee handbooks are up to date and in compliance with standards, and do not restrict employee rights under the NLRA.
Policies will need to be “narrowly tailored” to clearly explain the work rule/policy, why it is necessary as a legitimate business interest, and how the rule does not restrict employee NLRA rights.
A few reminders about things that have already been established as unlawful under the NLRA before this recent decision:
Employers may not restrict employee discussion about terms of employment, wages, hours, benefits, or working conditions. This is protected activity under federal law, and under many state laws.
Employers can neither prohibit nor encourage employee involvement in union activities or union membership.
The NLRB decision is effective now and applies to all employers covered under the NLRA and their workplace rules retroactively.
Policies must be reviewed and, if needed, re-written to specifically emphasize the narrow focus of the workplace rule, why it is required for business interests, and specify that it does not violate NLRA rights of employees.
The burden of proof that a workplace rule or policy cannot not be more narrowly focused, and is necessary to protect business interests, will be on the employer. It is highly encouraged to document the rationale behind why a policy or rule is in effect and how violation of the rule or policy would impact the business.
Employers should specify that the employer’s policy or rule does not prohibit Section 7 activity and should be written in such a way that the rule and intention is clear enough that an ordinary person can understand it.
At Vida HR, we can help with reviewing your handbook policies and work rules and recommend changes to more narrowly focus the policy to protect your business interests, and to ensure employee rights under Section 7 are clearly detailed in such policies. Contact us today to find out more.