The overwhelming majority (nearly 90 percent, according to the most recent report from the U.S. Bureau of Labor Statistics) of workers in the United States are not unionized. And yet, in the private sector most of those non-unionized workers have legal protections under the National Labor Relations Act (NLRA). Too often employers, particularly small employers that have no formal human resources function, are unaware or overlook the implications of that. Recent actions by the National Labor Relations Board (NLRB), however, warrant employers’ attention.
Universal Rights of Non-Supervisory Workers in the U.S.
Under section 7 of the NLRA, all U.S. workers in the private sector who are team members or individual contributors (not supervisors) have the legal right to engage in “protected, concerted activity” for their “mutual aid or protection” and employers are prohibited from interfering with this right. Sometimes referred to as “section 7 rights,” this has been defined to include activity engaged in by an employee on behalf of others besides the individual employee, with regard to their terms and conditions of employment. It therefore is much broader than activities to form a union and negotiate a collective bargaining agreement. Just exactly when activity is considered “protected” and when it is “concerted” are terms that have been interpreted differently over the years by the NLRB and the courts. Currently, we are in a period in which the NLRB is expansively interpreting both terms, providing far greater protections for employees and imposing more significant restrictions on employers.
Handbook Policies May Be Unlawful
Over the years, the NLRB has taken varying positions with regard to how employers phrase their restrictions on employee activity. Policies that require keeping information confidential, regulate internal or external communications including social media postings, limit recording of workplace meetings or conversations, or limit photographing people, places or things in the workplace all risk being deemed to run afoul of section 7 rights. Recent NLRB precedent had divided these workplace policies into categories – restrictions that were presumptively permissible, restrictions that were suspect, and restrictions that were presumptively impermissible. Those parameters, which originated from an NLRB decision involving the Boeing Corporation, were more recently eliminated several months back in Stericycle and Teamsters Local 628, which reinstated a prior test that assesses such policies on a case-by-case basis.
Under the NLRB’s analysis in Stericycle, employer policies cannot be considered through the eyes of a lawyer. The question is not whether there is a way to construe the policy permissibly, what the employer intended with its phrasing, or even whether the employer has ever actually applied its policy in a manner that violates employees’ section 7 rights. Rather, the NLRB said that it would consider employer policies from the perspective of the lesser power of an “economically dependent” employee, not trained as a lawyer, and will therefore deem a workplace policy unenforceable if it could possibly be construed as restricting employees’ protected concerted activity. Employers are then left to defend a challenged policy by proving it advances “legitimate and substantial business interests that cannot be achieved by a more narrowly tailored rule.”
Consider the Practical Application
The practical challenge from the Stericycle decision is that it is rarely possible to anticipate in advance the varying ways in which employees may act, particularly as technology changes, that may cause undue disruption or harm to the employer, its workers, or clients/customers. Employers therefore are usually inclined and advised to write behavioral and conduct policies broadly, setting out guiding principles and standards that are meant to capture a range of behaviors.
For example, in general insubordination is recognized as grounds for discipline. An employee who challenges an employer’s decision to withhold pay increases for a group of employees and continues to argue the point after being directed to get back to work, might be characterized as “insubordinate.” The employee’s actions might also be considered protected, concerted activity and, recognizing that, an employer might be careful not to apply its disciplinary policy against an employee in that context. Under Stericycle, however, the fact that the employer refrained from disciplining the employee is not determinative. The mere inclusion of “insubordination” in a discipline policy could render the policy subject to challenge on the ground that it could be construed as restricting employees from engaging in protected, concerted activity.
Expanding Beyond Policies to Employer Agreements
In mid-2023, the General Counsel to the NLRB had issued a memo taking the position that noncompete agreements are generally unlawful. That memo takes on greater weight as a result of the Stericycle decision. In the memo, the General Counsel reasoned that noncompete agreements interfere with employees’ ability to engage in protected activity because they restrict employees’ economic opportunities and dilute the threat of employees quitting and seeking to work for a local competitor.
The General Counsel’s analysis thus turned not on an employer’s direct actions, but on the economic consequences if an employer were to enforce its noncompete agreements, and how those consequences could deter employees from resigning or threatening to do so or make it more difficult for them to collectively organize with other workers. Considered in the current environment of much broader legislative and regulatory hostility to noncompete agreements on the federal and state levels, the General Counsel’s memo and analysis add another layer of legal risk for employers to consider.
When Is an Employee Speaking for Others Too
The NLRB also adopted a case-by-case approach in Miller v. Plastic Products, Inc., with regard to the question of whether an individual is acting on behalf of others and has thereby engaged in “concerted” activity. The NLRB overturned a prior decision that had established a checklist of specific factors to review in making that determination. The NLRB reasoned that the checklist was too limiting, as the checklist approach did not clearly cover the case before the NLRB, which involved an employee’s more spontaneous statements raising concerns about COVID protocols and the employer’s decision to remain open as an essential business during the early days of the pandemic. Rejecting the employer’s argument that the conduct at issue was simply individual griping by an employee who was known to be overly chatty and distracting, the NLRB concluded that, under the totality of the circumstances, the employee’s conduct amounted to concerted activity.
Key points to note from the Plastic Products decision are first that there are no bright lines to guide or determine when an employee’s actions will or will not be considered “concerted” activity. Second, when analyzing an employee’s conduct on a case-by-case basis, employers should consider the underlying circumstances of when, how and for whom an employee is raising concerns, and get legal advice before taking disciplinary action.
All Private Sector Workplaces Are Covered
Most significantly, none of these NLRB actions are limited to a unionized workplace. They apply to all private sector employers in the U.S. and therefore need to be factors considered when drafting and applying employer policies and agreements. Employers that look the other way or assume they are not covered thereby open themselves up to an additional universe of potential liability.
By Tracey I. Levy