The National Labor Relations Board reversed a stance that allowed employers to maintain certain employee policies, such as prohibitions against public criticism or conflicts of interest.

The ruling in Stericycle vs. Teamsters Local 628 means that policies restricting employee speech and action will need to be reviewed for compliance. The ruling is relevant to any company that has employees, whether the workplace has a union or not.

‘Stericycle’ rules at issue

In the Stericycle case, an employee handbook stated that conduct that intended to harm the company’s reputation would not be tolerated. Engaging in damaging behavior could lead to corrective action, including termination. Employees were further prohibited from engaging in “an activity that constitutes a conflict of interest” with the company or its management.

The NLRB held that the policy was unlawful because prohibiting an employee from damaging the company reputation could be construed as prohibiting employees from working collectively to improve the terms and conditions of their employment (e.g., joining with coworkers to talk to the media about problems in the workplace).

Likewise, the conflict-of-interest rule could be construed to prohibit unionizing or attempting to advance union interests. The NLRB clarified that such rules could presumably be saved if they were clarified to allow protected activity.

Further, the Stericycle handbook included a section on harassment complaints indicating that “all parties involved” would “keep complaints and the terms of their resolution confidential to the fullest extent practicable.” Again, this rule was deemed unlawful because it could be interpreted as preventing an employee who experienced sexual harassment from discussing their complaints and the company’s response.

Reversing ‘Boeing’ standard

The ruling reverses the NLRB standards established in Boeing Co. (2017) and LA Specialty Produce (2019). Under those standards, an employer was not required to narrowly tailor its rules to promote its legitimate business interests without unnecessarily burdening employee rights. Further, Boeing created a categorical approach to work rules that held that certain rules were always lawful, regardless of how they were drafted.

In a press release announcing the Stericycle decision, the NLRB indicated that Boeing “permitted employers to adopt overbroad work rules.” Now, under the Stericycle standard, workplace conduct rules are subject to scrutiny under the “reasonable tendency” standard. That means that any rule or policy that has a “reasonable tendency” to chill employees from exercising their Section 7 rights under the National Labor Relations Act may be unlawful.

Handbook review recommended

The new standard might make it more difficult for employers to enforce workplace conduct rules. Employers will need to be more careful about how they word and enforce their rules, and they will need to be able to show that the rules are narrowly tailored to meet a legitimate business purpose.

Among others, policies that may need review include those: