Employer Alert: Dust Off Your Handbooks, as Newly Aggressive NLRB Approach Likely Requires Changes

August 17, 2023 by

It’s been a busy year for The National Labor Relations Board (NLRB), which recently gained headlines after attacking the validity of some severance agreement provisions (e.g., nondisparagement clauses and confidentiality provisions) and proposing a ban of noncompete agreements. The NLRB now has set workplace rules typically found in handbooks in its sights.

Earlier this month the NLRB adopted a new standard to assess the lawfulness of workplace rules.  According to the Board, if an employer’s rule “has a reasonable tendency to chill employees from exercising their rights”, then the rule is presumed to be unlawful. Employers have an opportunity to counter this position but must show that that its rule advances a legitimate and substantial business interest and the employer cannot achieve this necessary goal with a more narrow rule.  This change in approach immediately impacts workplace rules, including but not limited to social media use, confidentiality expectations, workplace decorum expectations, handling of safety complaints, and even rules addressing insubordination.

There has been a back and forth on the NLRB’s approach, depending upon the party in power.  In 2004, the Board sided with employees, providing a more expansive interpretation to what might violate workers’ rights in the Lutheran Heritage Village-Livonia case.  This approach continued until 2017, when the NLRB struck the 2004 standard and created a new, stricter test in Boeing Co. (2017) and LA Specialty Produce Co.  (2019). The NLRB has shifted again this year in Stericycle, Inc., returning to a standard resembling the 2004 approach.

Notably, the National Labor Relations Act (NLRA) does not apply to supervisors (in most cases), independent contractors, workers employed by a parent or spouse, air and rail carriers covered by the Railway Labor Act, agricultural and domestic workers, and public-sector employees.

Employers undoubtedly are left in a defensive posture, with the burden to justify the legitimate and substantial business interest the company has in deploying the rule, as well as showing that the need cannot be met with a lesser, narrower rule. Employers should quickly gain an understanding of what the NLRB perceives as invalid and make appropriate changes to their policies and handbooks.

Russ Brown

Russ Brown represents businesses and executives, with a focus on labor and employment law. He is regularly recognized for his legal acumen, with numerous honors as a Super Lawyer and Rising Star, and other business leadership awards from Dallas Business Journal and D Magazine. Mr. Brown co-founded Brown Fox and serves as the firm’s Managing Partner.

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