NLRB Rules Under the New Case of Stericycle, Inc.
Do Non-Union Companies Have To Change Their Employee Handbooks?
You may have heard from articles on the Internet (some of which are borderline alarmist) or through your HR Department, that the NLRB (National Labor Relations Board) on August 2, 2023 laid out new rules on what can and cannot be in your Employee Handbooks. This is under what is called Section 7 of the National Labor Relations Act. Does this affect me as a non-union company?
Bottom Line:
Although technically the new rules apply to both union and non-union companies, practically speaking it will have little impact upon non-union shops. This is because the primary reason for Section 7 is to allow employees to “get together” and discuss union issues–not present for non-union companies.
Example 1: Union Employer
Employee Frank would like to turn the company into a union shop. There will have to be an election in which the majority of the employees approve. So he needs to get as many co-employees as possible to agree.
As such, he needs to “get together” or “band together” other employees to discuss the benefits of unionization. This is done by informal meetings while working at the Company facility.
The Company’s Employee Handbook forbids cell phone use during working hours. This interferes with Frank’s ability to communicate with other employees about unionization.
The NLRB finds out and sanctions the company under Section 7 for interference with the ability to band together for the purposes of unionization.
In light of the new Stericycle case, the Company should change its Employee Handbook to forbid cell phone use only for personal and not business purposes. This will make clear the Company is doing nothing to interfere with an employee’s right to unionize.
Example 2: Non-union Employer
Frank is fed-up not being able to have his 30-minute meal breaks. He does not need to “get together” or band together with fellow employees to assert his rights. As an individual, he first protests to his supervisor and when this does not help, he brings a complaint with the EEOC.
He also contacts an attorney. The attorney either brings a class action or a PAGA lawsuit (joins together other aggrieved employees).
The Employee Handbook also forbids cell phone use during working hours. It is unlikely the NLRB will bring a Section 7 complaint based on the Handbook. If there is a complaint, it would be through the EEOC. In fact, most employers only have a problem with personal use of cell phones and this does not interfere with employee rights to certain violations of the California Labor Code, including meal breaks.
Obviously, employees discuss among themselves Labor Code violations, but this is usually brief in nature and the assertion of their legal rights is rarely restrained by an Employee Handbook provision.
Significantly, the main concern of the NLRB is to enforce union rights. Would it really waste its limited resources to go against non-union companies regarding non-union issues?
Caution: Union Employers
This Memo is for non-union companies. If you are union company, the Stericycle opinion relates directly to you, requiring substantial changes to your Employee Handbook. Please consult with your attorney of choice.
Section 7 of the National Labor Relations Act:
In relevant part states:
The right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.
Sounds like employee protection to organize a union, right? After all, the legislative history of Congress in enacting the National Labor Relations Act in 1935 was to “make clear the policy of the United States to encourage collective bargaining by protecting workers’ full freedom of association.”
Not so fast. It also protects employees “mutual aid or protection”. This could mean employees have the right to band together and discuss non-union issues such as California Labor Code violations.
Over the years there are innumerable cases where courts have debated whether this applies to non-union rights. For example, the landmark case of IBM Corp., 341 N.L.R.B. No. 148 (2004)[whether another employee may be present during the company’s interview in an investigation for discipline] held Section 7 rights to not apply to non-union companies.
But most cases will not let go and come out and say point-blank such rights do not apply. They keep mouthing in theory it applies to non-union companies, even though NLRB rarely prosecutes under Section 7.
In fact, the cases cited by Stericycle involved union employers. One of the only cases discussing non-union issues was First American Enterprises in footnote 112, page 7. It made a casual reference to “wages and benefits”, but there were no details whatsoever in the case to these matters. The case involved a union shop and primarily involved union issues. As a matter fact, if it was not for the union issues, the case would probably not have been brought.
Further research indicates very little if any cases under Section 7 are brought against non-union companies.
The author has read dozens of cases and rarely do you see examples of Section 7 enforcement against non-union companies, for the simple reason that union issues have not come up in those matters.
The Stericycle, Inc. Case (372 NLRB No. 113 (2023)):
The case involved provisions in union company’s Employee Handbook on subjects such as cell phone usage, personal conduct, conflicts of interest, harassment investigations and camera as well as email systems. It held this interfered with the employee’s right to union organize.
In previous decisions, a company only needed to show it was advancing a legitimate and substantial business interest in its company policy. But the court changed this as to whether an employee would be personally or subjectively fearful of discussing matters with other employees. In other words, subjectively “chilled” or coerced [“Our standard requires the General Counsel to prove that a challenged rule has a reasonable tendency to chill employees from exercising their Section 7 rights. We clarify that the Board will interpret the rule from the perspective of an employee who is subject to the rule and economically dependent on the employer”].
Even worse, this handholding for employees applies regardless of the intent of the company (“The employer’s intent in maintaining a rule is immaterial”). The court overwhelmingly sided with the employees. There can be no company policies that “chill” or personally make uncomfortable an employee exercising his or her rights.
However, as stated in this Memo, these new rules apply more specifically to union companies and union organizing.
Make Changes to Your Employee Handbook?
To be safe, some changes should be made to your Employee Handbook. It is recommended you insert the following new provision which incorporates some of the Section 7 issues that might apply:
Section 7 Rights:
It is expressly against Company policy for any individual to take steps to interfere with an employee’s ability to assert federal or state legal rights. Accordingly, employees have the right to discuss; voice concerns; meet; compile evidence; investigate; share; converse; seek legal review; confront and criticize management (as long as not false and defamatory) and otherwise communicate as to work related issues, including but not limited to: wages/salary; job titles and classifications; job duties; statements or conduct of management; hours; scheduling; promotions; discipline; transfers; overtime; rest and meal breaks; reimbursement of business expenses; all forms of discrimination; sexual and other forms of harassment; retaliation; safety; and hostile work environment. This right is guaranteed under Section 7 of the National Labor Relations Act, which protects employees engaged in concerted activities for the purpose of “mutual aid or protection.”
These rights may be exercised during work hours, as long as it does not directly and prejudicially, and for unreasonable periods of time, affect productivity and the performance of essential duties.
There shall be no retaliation or adverse employment action taken in the exercise of these rights.
Anyone receiving information of a violation of this policy, should bring it immediately to the attention of his or her supervisor.
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