What Workplace Rules Violate the NLRA Following the NLRB's Stericycle Decision?

The National Labor Relations Board (NLRB) is rigorously enforcing a new, employee-friendly standard that renders common workplace rules unlawful, as demonstrated by a recent case where a La-Z-Boy dealership faced nearly $300,000 in penalties. This landmark shift, established in the Stericycle decision, means employers must immediately review their handbooks to avoid costly violations of the National Labor Relations Act (NLRA).

What is the NLRB's New "Stericycle Standard" for Evaluating Work Rules?

The Stericycle standard is a legal test created by the NLRB in its 2023 Stericycle Inc. decision to determine if a workplace rule unlawfully interferes with employees' rights. Under this standard, a work rule is considered unlawful if it has a "reasonable tendency" to chill employees from exercising their rights under the NLRA, even if the employer did not intend for it to have that effect. The burden is on the employer to prove that the rule is justified by special circumstances that outweigh its potential negative impact on employee rights. This represents a significant shift from previous, more employer-friendly standards, making it easier for the NLRB to challenge common policies.

Which Common Handbook Policies Are Now Under Scrutiny?

Based on the La-Z-Boy case and NLRB guidance, several common policies are now high-risk. The dealership’s handbook contained three rules the Board found unlawful:

1. Prohibiting Discussions about Wages, Hours, and Working Conditions: This rule directly infringes on a core NLRA right: the ability of employees to engage in protected concerted activity for mutual aid or protection. This includes discussing pay or workplace issues with colleagues.
2. Blanket Ban on Personal Use of Email/Computer Systems: A total prohibition on non-work use of company systems can be unlawful because it may prevent employees from using these systems—during non-working time—to organize or discuss workplace issues.
3. Restricting Use of Company trademarks: While protecting intellectual property is valid, an overbroad rule that prevents employees from using the company name or logo in the context of complaining about their employment (e.g., on a picket sign) can violate the NLRA.

Employers can no longer assume that a "reasonable" reading of a rule will protect them. The NLRB will now evaluate how an employee could reasonably interpret the rule, which is a much broader interpretation.

What Were the Consequences for Maintaining Unlawful Work Rules?

The financial and operational consequences for the La-Z-Boy dealership were severe. The settlement, detailed below, highlights the comprehensive "make-whole" remedies the NLRB will pursue.

The inclusion of consequential damages is particularly significant. These cover direct or foreseeable financial harm from the unlawful termination, such as credit card debt incurred or the cost of COBRA health insurance premiums. The NLRB’s General Counsel has instructed regional offices to aggressively seek these damages in all applicable cases.

To ensure compliance and avoid similar penalties, employers should take immediate action: audit employee handbooks with the Stericycle standard in mind, train managers on what constitutes protected concerted activity, and consult with HR or legal professionals specializing in labor law. Proactively revising policies is far more cost-effective than defending against an NLRB complaint.