Senior Vice President, Employment Policy Division, U.S. Chamber of Commerce
August 15, 2023
The National Labor Relations Board (NLRB) recently issued a decision in a case called Stericycle. Stericycle deals with the seemingly trivial issue of employee handbooks and whether provisions in those handbooks violate the National Labor Relations Act (NLRA). However, the real-world implications for employers are anything but trivial, as the NLRB is once again using an indecipherable standard to second-guess every phrase in employee handbooks.
By way of background, the NLRA protects the right of workers to engage in “concerted activity.” Concerted activity could include discussing wages, benefits, and other terms and conditions of employment with management or co-workers, as well as joining a union. The Act also protects the right of workers not to engage in such activities.
Over the years, there have been questions about whether certain employee handbook language would deter workers from engaging in concerted activity and therefore be unlawful. There are obvious examples of illegal language — for example a handbook that said something to the effect of “we don’t allow unions here” would clearly be unlawful. But other provisions are not so clear cut.
Over the years, the NLRB has gone back and forth on what test to use in judging handbook language. During the Obama era, the NLRB used an extremely anti-employer interpretation under which seemingly innocuous employee handbook language was found unlawful. For example, provisions requiring workers to “be respectful to the company, other employees, customers, partners, and competitors,” were ruled illegal because, in the view of the Obama NLRB, a “reasonable” employee would read such language to mean they couldn’t form a union or discuss workplace conditions.
Another ridiculous example related to the use of e-mail. For example, a handbook that stated: “Material that is fraudulent, harassing, embarrassing, sexually explicit, profane, obscene, intimidating, defamatory, or otherwise unlawful or inappropriate may not be sent by e-mail,” was ruled illegal. Such language would seem to be common sense in a workplace, but under its extreme interpretation of the law, the Obama NLRB disagreed.
The result was massive confusion for employers as to how they could possibly write a legal employee handbook without the NLRB swooping in with a complaint (as illustrated in a 2015 U.S. Chamber report). Fortunately, the Trump NLRB established a far more reasonable standard in 2018 with its decision in Boeing, which offered relief from the NLRB’s nitpicking. Such relief has proved short-lived.
In Stericycle, the NLRB revived the Obama-era standard. And it is already proving problematic. In early August, Starbucks was hit with a complaint for what most people would consider benign handbook language. In the “How We Communicate” section of the company’s handbook, it states: “Partners are expected to communicate with other partners and customers in a professional and respectful manner at all times. The use of vulgar or profane language is not acceptable.” The legal gymnastics required to argue that this language is illegal are impressive. Unfortunately, it leaves employers in a bind.
For starters, if a business cannot prohibit its employees from using profanity with customers, it effectively has no control over the workplace. Customers experiencing profanity are also unlikely to return. Some employees won’t enjoy the experience of working at an establishment where co-workers can be rude to one another and use profanity, increasing recruitment and retention challenges. Employers can also fall afoul of Title VII of the Civil Rights Act if they permit a hostile work environment, which allowing employees to insult one another and use profanity would certainly create.
There are other significant concerns about the NLRB’s new direction. First, although a complaint about a handbook provision may seem minor on the scale of criminality, it is still a federal charge. If a business doesn’t fight the complaint (Starbucks is appealing a charge against it), it will have a violation of federal law on its record. Second, if the business faces a union organizing campaign, the NLRB can use this manufactured history of “violations” to impose stricter scrutiny around a representation election. Third, unions can harass employers by filing repeated complaints related to handbook provisions, secure in the knowledge that the Board is likely to take their side. Fourth, if the employer is a federal contractor, the government can use the evidence of a labor law violation to take away the contract. And finally, employers are now back in a situation where even with the most expert of legal counsel it will be virtually impossible to write a fully compliant employee handbook.
In 2019, the book “How to Become a Federal Criminal” was published. It discussed absurd federal laws few people had ever heard of and was meant as something of a joke. Unfortunately for employers, the NLRB must have read it and decided they needed to provide additional material.
About the authors
Spencer oversees the Chamber’s work on immigration, retirement security, traditional labor relations, human trafficking, wage hour and worker safety issues, EEOC matters, and state labor and employment law.