What Physician Employees and Physician Employers Should Know About Stericycle

On August 2, 2023, the National Labor Relations Board (NLRB) issued its ruling in Stericycle, Inc. concerning employee handbook rules and policies. This ruling affects work rules challenged under section 8(a)(1) of the National Labor Relations Act (NLRA).

The new ruling, which modifies the standard that had been in place for the last six years, affects physician employees and employers in that the NLRB counsel must prove that a challenged rule/policy has a “reasonable tendence” to discourage employees from exercising their rights under Section 7 of the NLRA, which protects the rights of workers to act for their collective benefit or protection regarding conditions and terms of employment.

Background

In 2004, the NLRB issued a ruling in Lutheran Heritage Village–Livonia holding that a policy, rule, or handbook provision violated the NLRA if an employee could reasonably interpret a workplace rule as precluding an employee from exercising their protected rights under the NLRA.

In 2017, the Trump Administration NLRB overturned Lutheran Heritage Village–Livonia in the Boeing ruling. In Boeing, the NLRB held that the lawfulness of work rules was subject to a balancing test. The balancing test weighed the employer’s legitimate reasons for the rule against whether the rule could have a chilling effect on the employee’s right to engage in protected activity under Section 7 of the NLRA. If the potential adverse impact protected rights of the employee outweighed the justification for the rule, then the NLRB would determine the rule to be unlawful.

The NLRB emphasized that an overly broad rule was not enough to breach the NLRA. The decision gave deference to an employer’s legitimate business interests in maintaining workplace policies.

Turning the Tide

In Stericycle, the tide turned in favor of employees. The NLRB concluded that the standard established in Boeing and its progeny (LA Specialty Co., 2019) failed to protect employees by allowing employers to enact overly broad work rules that discourage employees from exercising their NLRA rights.

The NLRB’s new analysis of workplace policies/rules focuses on whether an employee could reasonably interpret the policy/rule to have “coercive meaning.”

The new standard articulated in Stericycle is likely to affect rules found in most employee handbooks. The NLRB stated ambiguous rules would be interpreted in favor of the employee and clarified that it would consider the rule in question from the perspective of an employee who is subject to the rule and economically dependent on the employer, and who contemplates engaging in protected activity under Section 7 of the NLRA. The employer can rebut this presumption by demonstrating that the rule serves a valid and substantial business interest.

This ruling, which will impact use of employer email for personal purposes, cell phone use at work, confidentiality provisions, and social media policies, raises a suspicion that unfair labor practice allegations will increase.