On August 2, 2023, the National Labor Relations Board (NLRB) changed the law again governing employee handbooks. The NLRB’s decision in Stericycle, Inc. overruled the employer-friendly precedent in place for the past six years under Boeing Co. (2017), which was later refined in LA Specialty Produce Co. (2019).
The NLRB explained that the primary problem with the standard previously in place under Boeing and LA Specialty Produce was that it improperly permitted employers to adopt overbroad work rules that chill employees’ exercise of their rights under Section 7 of the National Labor Relations Act. According to the NLRB, under that prior standard, an employer was not required to narrowly tailor its rules to promote its legitimate and substantial business interests without unnecessarily burdening employee rights.
Under the new standard adopted in Stericycle, the NLRB’s General Counsel must prove that a challenged rule has a “reasonable tendency to chill employees from exercising their Section 7 rights.” If the General Counsel does so, then the rule is presumptively unlawful. However, 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. If the employer proves its defense, then the work rule will be found lawful to maintain. This rule will be interpreted from the perspective of the employee and on a case-by-case basis.
The new standard applies retroactively to pending cases.