Why employers should check their employee handbooks right now

A new employee-friendly ruling from the NLRB means it is time for employers to reevaluate their employee handbooks in light of a new test for determining whether workplace rules violate employee rights.

Under the new test, a work rule that an employee could reasonably interpret to have a coercive meaning is presumptively unlawful. The presumption can be rebutted, but there is no question that the new standard heavily favors employees.

Background: What’s this all about?

Under Section 8(a)(1) of the National Labor Relations Act, employers cannot interfere with, restrain or coerce employees with respect to the exercise of their right to engage in what are known as “concerted activities.” Examples of such activities include talking with co-workers about wages and benefits or talking to the media about workplace problems.

The big question: When do workplace rules cross that line and violate the NLRA?

Before the NLRB’s ruling earlier this month, a more employer-friendly (translation: Trump era) standard was in place. Under that standard, the board evaluated the lawfulness of a facially neutral policy by looking at two things: the nature and extent of the potential impact on NLRA rights, and the legitimate justifications associated with the rule.

With the new ruling, the board has returned to a more employee-friendly standard that more quickly presumes workplace rules to be unlawful.

Employee handbooks and neutral rules

Put simply, if a facially neutral rule could reasonably be interpreted to be coercive, it is presumptively unlawful. The rationale here is that a coercive rule has a chilling effect on the NLRA rights of employees.

Employers can rebut the presumption by showing two things: that the rule advances a legitimate and substantial business interest, and that they cannot advance that interest using a narrower rule.

In practice, if push comes to shove and the board finds a rule to be presumptively unlawful, this is likely to be a difficult test for employers to meet.

Employers must understand just how employee-friendly this standard is. Remember that it applies to facially neutral rules, and that a rule can be found to be presumptively unlawful “even if a contrary, noncoercive interpretation of the rule is also reasonable.”

Let that sink in for a second: Even if a workplace rule can reasonably be interpreted to be noncoercive, it can still be found to be presumptively unlawful under the new standard.

That means employers must take a magnifying glass to workplace rules expressed in employee handbooks to examine whether any of those rules may reasonably be interpreted as unduly coercive — and thus illegal — under the NLRA.

What to look for

Unfortunately for employers, the current board is likely to take an employee-friendly and expansive approach when examining whether a particular workplace rule is likely to unlawfully chill protected concerted activities.

Essentially, they must be confident that they will be able to meet the new decision’s rebuttal test in the event that a challenge to a particular rule is raised. Again, the question is whether the rule advances a legitimate and substantial business interest that cannot be advanced via a narrower rule.

There are many seemingly innocuous workplace rules that may run afoul of the new standard.

Take, for example, a rule requiring employees to fully cooperate in employer investigations. If the rule does not explain that it is inapplicable in cases involving protected concerted activity, then it may violate the new standard.

In short, as a best practice it is advisable to clearly state that no workplace rule is intended to restrict the NLRA rights of employees – and that no rule should be interpreted as such. Of course, any rule that facially restricts NLRA rights should be stricken immediately.

The new ruling follows a February ruling that limited the ability of employers to include confidentiality and non-disparagement clauses in severance agreements.