Last month the National Labor Relations Board issued a ruling in Stericycle, Inc., making unlawful many common employee policies.
This strongly employee-friendly decision makes presumptively unlawful any policy that is considered to have a chilling effect on protected activity under Section 7 of the National Labor Relations Act. Section 7 guarantees unionized and non-unionized employees' rights to engage in concerted activity, including sharing of information and participating in activities for the purpose of mutual aid and protection in the workplace, regardless of whether it is associated with possible union organizing.
Due to concern that workplace policies can have the "coercive" effect of chilling employee participation in concerted activity under Section 7, the Stericycle decision establishes a presumption that a policy is unlawful if a reasonable interpretation of the policy has a "reasonable tendency" to deter employees from engaging in concerted activity. In determining whether a policy is presumptively unlawful, the Board views the policy from the "perspective of an economically dependent employee who contemplates engaging in Section 7 activity." Importantly, a policy may be unlawful "even if a contrary, noncoercive interpretation of the [policy] is also reasonable."
The employer can overcome the presumption and prove the policy to be lawful only by demonstrating (1) that the policy advances a legitimate and substantial business interest and (2) that the policy could not be replaced with a more narrowly tailored one.
The Stericycle ruling has immediate and retroactive effect. Accordingly, it is critical that employers engage as soon as possible with their counsel to carefully evaluate all workplace rules, policies, and procedures under the Stericycle test and make revisions as needed. Employers are likely to have in place employee conduct, social media, electronic use, confidentiality and non-disparagement policies, among others, that are unlawful under the new standard. In addition, based on the Stericycle ruling and recent opinions issued by the National Labor Relations Board's General Counsel, all employment agreements, including but not limited to non-disclosure, non-disparagement, non-competition and non-solicitation agreements and provisions, as well as all severance agreements, should be promptly reviewed.
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