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Does This Work Rule Prevent the Discussion of Wages? Stericycle and Beyond

All employers—and not just union employers—beware: On August 2, 2023, in the long-awaited Stericycle Inc. decision, the National Labor Relations Board (the “NLRB” or the “Board”) announced a return to the detailed analysis of work rules on August 2, 2023. This decision has significant impact on all employee handbooks and other workplace rules as the Board returns to the Obama-era standard set forth in Lutheran Heritage, with a slight modification. The Stericycle standard now asks whether “a challenged rule has a reasonable tendency to chill employees from exercising  their Section 7 rights,” looking at the rule from the perspective of an employee who is not only subject to the rule, but also economically depending on the employer. If so, the rule is considered presumptively unlawful.

In a deviation from that prior standard, however, the employer now has a specific ability to rebut that presumption by showing that the rule advances “a legitimate and substantial business interest” and that no more narrowly tailored rule can advance that interest. An employer who proves this defense can maintain the work rule. While not as employer-friendly as the standard announced under the President Trump-era NLRB, which balanced (1) the nature and extent of the potential impact on employee protected rights with (2) the employer’s legitimate justifications associated with the rule, this gives employers a potential defense for such narrowly tailored rule.

Practically, what does this mean for employers? Consider the discussion of wages. If a rule prevents or could be read by an employee to prevent employees from discussing wages (a clear Section 7 right), it’s considered presumptively unlawful. Here, there’s no legitimate and substantial business interest that could support a rule preventing the discussion of wages under the National Labor Relations Act—and some states even have their own rules prohibiting employers from preventing wage disclosures.[1]

Let’s consider a more nuanced rule in contrast, such as a prohibition of photography in patient-facing areas of a medical facility. While the rule restricts employees’ ability to make audio or video recordings or photograph working conditions, the rule directly relates to patient privacy, and medical facilities have a well-understood interest. Here, the rule likely advances “a legitimate and substantial business interest,” such that the rule will likely withstand Board scrutiny. 

So, what’s an employer to do? Here are some steps for employers to consider as the Board works to flesh out this new standard with case law:

  1. Do you need this policy or rule? Review each handbook policy or other work rule to determine whether you truly need a policy or work rule on the specific topic. For example, “Professionalism in the Workplace” might be a policy with only generic statements that could be removed. Similar generic policies can easily include sentences that can be misinterpreted by employees.
  2. Does this policy or rule address, in any way, protected activity? Under the National Labor Relations Act, employees have the right to:
    • Engage in union activity in your workplace;
    • Join a union, whether recognized by the employer or not;
    • Refuse to join a union or engage in organizing activity;
    • Discuss wages or benefits with co-workers;
    • Discuss working conditions, including health and safety;
    • Circulate a petition asking for better hours;
    • Discussing problems in the workplace with the employer, a government agency, or even the media; and
    • Performing any of these activities as part of a group of workers or on behalf of others.

Base all interpretations of the policy in the light of an employee who is economically dependent on you as the employer—not a lawyer who can make an argument about how this rule or policy doesn’t address one of these activities.

  1. Does this policy or rule cover something that is inherently protected? There are several topics that should never be covered in a policy, including wage disclosure, prohibition on joining a union or other concerted activity, and after-hours surveillance of employees. For example, any policy addressing the disclosure of wages should be removed—and all confidentiality policies and provisions containing language such as “other personal information” or “other employee information” should be reviewed to determine if an employee would read the policy as preventing such a discussion.
  2. What are you, as the employer, looking to protect with this policy or rule? Is that clear in the text of the policy or rule? Getting to the heart of what you wish to protect will help refine the language of the rule. For example, in a media policy, employers should address about what gets said on behalf of the Company, rather than limiting what an employee or group of employees say about working conditions at the Company. Because employees have the right to discuss those working conditions with the media, any media policy should make clear that it reflects statements made on behalf of the Company. 
  3. Is there a narrower way to protect your interests? For example, if only specific employees have access to certain confidential information, consider removing a handbook provision on confidentiality (which isn’t enforceable in a court of law in any event) and entering into a narrowly tailored confidentiality agreement.

Above all, reviewing a handbook with trusted counsel is paramount in these ever changing times, as each employer can tailor their approach to the needs of their business. 

[1] For example, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New York, Vermont, Virginia, and Washington all have specific statutes.

  • Jennifer L. Muse

    Jenn Muse is an employment law attorney who provides proactive counsel to businesses on practical strategies, steps, and policies to address human resources and relations concerns. She focuses her practice on employment ...

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