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Handbooks Just Got a Whole Lot Scarier

by Julia Melnicoe Insel | | August 4, 2023

If you read our blog, you know that the National Labor Relations Board (“NLRB” or the “Board”) has been feeling particularly spicy this year.  Well, they are at it again, and this time, they’ve issued a decision in Stericycle, Inc. that requires a very close look at your handbooks and policies.

Don’t have a unionized workforce?  Doesn’t matter. The National Labor Relations Act (“NLRA”) also applies to employees engaging in protected activity, such as joining together to discuss wages and working conditions, whether a union is involved or not.  So don’t close this tab just yet.

The decision is a little complicated, so we’ll try to boil it down to the most important points.  The basic idea is that workplace policies can’t infringe on employee’s rights under the NLRA, directly or indirectly.  For example, a policy instructing employees to keep their wage rates confidential would clearly be unlawful under the NLRA (and California law!).  But, policies that merely discourage employees from engaging in protected activity can also be a problem. For example, a media policy that instructs employees to refer all outside inquiries about the company to the CEO also might infringe on employee rights—because employees might believe they are prohibited from speaking to the media in their own capacity.

For the last five years or so, the NLRB has taken the position that policies that discourage employees from engaging in protected activity are nevertheless lawful if the employer’s reason for needing the policy outweighs the effect on employee rights.  The classic example is a “no recording” policy. Although employees have the right to record working conditions, employers could still have a “no recording” policy under the old standard to the extent the employer’s legitimate business interest (e.g., protecting customer privacy) was more important.

This week’s decision mostly eliminates the employer’s reasoning from the analysis.  Now, the NLRB will assess whether a “reasonable employee” could interpret a policy as discouraging them from engaging in protected activity.  The NLRB explained that because a “reasonable employee” is in a disadvantaged economic position compared to the employer, they likely will interpret policies broadly to avoid discipline.  So, a reasonable employee’s interpretation of a policy need not be the most obvious or practical one. 

If the NLRB decides the policy could “chill” a reasonable employee’s exercise of their rights, the policy is unlawful unless the employer can show that it could not accomplish a “substantial and legitimate” business purpose through a more narrowly tailored rule.  In other words, the employer must prove that there wasn’t a better way to write the policy.  

The problem here is twofold: first, it’s difficult to anticipate how employees will read unintended meanings into your policies.  Second, it’s very tricky to draft policies that are general enough to be flexible for the circumstances, but sufficiently focused to avoid those unintended meanings.  For example, many employers have rules that employees may not be insubordinate, rude, or disrespectful in the workplace.  Sounds like a perfectly rational expectation—unless your employee interprets that language to mean they will get in trouble if they complain about wages with their coworkers. Some policies that are especially likely to cause problems are those addressing employee behavior, such as standards of conduct, social media, off-duty conduct, conflicts of interest, public relations, customer service, and more.

Keep in mind that this decision will also affect policies outside your handbook.  For example, if you have a policy relating to confidentiality of workplace investigations, you need to give it a hard look.  Although the NLRB previously suggested that an employer could require temporary confidentiality during an investigation for legitimate reasons (e.g., to avoid witnesses colluding), the new decision suggests you need a more tailored policy, or even a case-by-case assessment for each investigation.

The take-home message: You will need to carefully consider the wording of each and every policy.  If you already prepared your handbook for the year, you need to take a second look. If you weren’t planning to revise your handbook this year, reconsider.  If you’re planning on hiding under the bed, we get it.

We’re here to help.

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