The National Labor Relations Board (NLRB or Board) issued its decision in Stericycle, Inc., 372 NLRB No. 113 (2023), adopting an employee-friendly standard when analyzing work rules that do not expressly restrict employee’s protected activity, but may nonetheless have that effect.

The case is important as it establishes a high standard for facially neutral work rules. If a work rule can be reasonably read as infringing upon protected employee activity (even if an alternative reading is reasonable), the rule is presumptively unlawful. An employer will then have the burden of showing that the rule advances a legitimate business interest and that such interest cannot be accomplished by a more narrowly tailored rule.  Employers should review their existing work rules with trusted labor counsel to ensure that they are not in violation of federal labor law.


Section 7 of the National Labor Relations Act (NLRA) outlines certain employee rights, including the right to self-organization, to form, join, or assist labor organizations, to bargain collectively, and to engage in other concerted activities (29 U.S.C. § 157). Employers cannot infringe on these rights by way of workplace rules, even if these rules do not expressly restrict such activity. The standard for analyzing whether employer rules unlawfully restrict such activity has changed over the years.

In Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), the NLRB rejected a categorical approach to finding work rules lawful or unlawful. Instead, holding that a finding of a violation would be “dependent upon a showing of one of the following: (1) employees could reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.” In interpreting the first of these, the relevant inquiry is not if a rule could conceivably be read to infringe on Section 7 activity, but how a reasonable employee would read such a rule.

In 2017, the NLRB changed the standard for the first factor to a more employer-friendly balancing test in Boeing Co., 365 NLRB No. 154 (2017). Under this standard, the Board will evaluate (1) the nature and extent of the potential impact on the NLRA and (2) the legitimate justifications associated with the rule. These two factors were balanced against each other under this standard. More, the Board established a categorial classification system.

In Category 1 were rules that were always lawful to maintain, in Category 2 were rules that were sometimes lawful to maintain, and in Category 3 were rules that were always unlawful to maintain. For example, at issue in Boeing was an employer work rule that restricted the use of cameras at the worksite unless prior permission was granted. The Board weighed the employees’ interest in being able to document or record at the worksite against the employer’s interest in maintaining a high level of confidentiality. The Board also found this to be a Category 1 rule, allowing all employers to maintain this rule.

NLRB Overrules Boeing and Adopts a Modified Lutheran Heritage Standard

In its decision earlier this week, the NLRB rejected Boeing, instead adopting a modified version of the Lutheran Heritage standard when analyzing facially neutral work rules. Under this new standard, if a reasonable employee could conceivably interpret a rule to infringe upon Section 7 rights, the rule is presumptively unlawful. This is true even if a contrary, non-infringing interpretation of the rule is also reasonable.

An employer can rebut this presumption by showing that the rule advances a legitimate business interest and that this interest cannot be achieved by a more narrowly tailored rule. The biggest difference from Lutheran Heritage is that the board will read the rule from the perspective of an economically dependent employee who is contemplating engaging in Section 7 activity, rather than merely a reasonable employee. Under this new standard, an employer’s intent in drafting the rule is immaterial. The Board also does away with the categorical approach and will review each rule on a case-by-case basis.

The Board reasoned that this updated standard was needed as Boeing permits employers to adopt overbroad work rules that chill employees’ exercise of their rights and gives too much weight to employer interests. The Board states that this new standard is consistent with the practice of construing a work rule against the employer as the drafter. Employers will need to narrowly tailor their rules to minimize, if not eliminate, their potential to infringe upon employee rights.

Finally, the Board held that it would apply this standard retroactively.

Bottom Line

Employers will need to be mindful when reviewing and implementing work rules. Rules that could be read to infringe upon Section 7 activity will be found presumptively unlawful, and the employer must show that these rules advance a legitimate business interest and that this interest cannot be accomplished by a more narrowly tailored rule – a very high bar to clear. Accordingly, employers should consult with their trusted labor counsel and review their existing work rules as well as when they draft new rules.

Note – FCA’s policy templates were confirmed to fit within the NLRB’s new standard for assessing work rules. Click here to access.