Late summer brings picnics, hiking, and general fun. It also brings a slew of NLRB decisions as the agency’s fiscal year comes to an end on September 30. One of the more highly-anticipated decisions concerns the lawfulness of employer work rules. On August 1, 2023, the National Labor Relations Board (Board) issued a decision in Stericycle, Inc., 372 NLRB No. 113 (2023) overruling existing precedent and establishing a stricter test that may render some existing work rules facially unlawful. Stericycle, which had been briefed and pending for over a year, brings us full circle by returning to an earlier (and modified!) test.

Existing Precedent: Boeing

In The Boeing Company, 365 NLRB No. 154 (2017) (Boeing), the Board established a balancing test between the potential impact on the employee’s rights under Section 7 of the National Labor Relations Act (NLRA) and the employer’s legitimate justifications associated with the rule. The Board set forth three categories to classify work rules, although the Board noted that these categories were not part of the test. In short, Category 1 policies were always lawful, Category 2 policies were subject to individualized scrutiny, and Category 3 policies were always unlawful.

Boeing and its progeny evaluated work rules from the perspective of a reasonable employee to determine whether they would reasonably construe a work rule to restrict their Section 7 rights. The Board criticized earlier tests which only required that an employee hypothetically could construe the rule as limiting their Section 7 rights.

Earlier Test: Lutheran Heritage

The Board in Martin Luther Memorial Home, Inc. d/b/a Lutheran Heritage Village-Livonia, 343 NLRB No. 75 (2004) set forth a three-prong test in evaluating work rules. Boeing only overruled the first prong of Lutheran Heritage in which the rule is evaluated to determine whether employees “would reasonably construe the language to prohibit Section 7 activity.” However, subsequent cases applying this test arguably departed from the Lutheran Heritage test by inquiring only whether the rule could be reasonably construed to have a coercive meaning—holding that ambiguous work rules should be construed against the employer.

New Standard: Stericycle

In Stericycle, the Board established a new test which “builds on and revises the Lutheran Heritage standard.” The test first requires the General Counsel to show that a challenged rule has a reasonable tendency to chill employees from exercising their Section 7 rights. This analysis is from the perspective of a reasonable employee who is subject to the rule, economically dependent on the employer, and who is considering exercising their Section 7 rights. The rule is presumptively unlawful if the General Counsel establishes that a reasonable employee could reasonably interpret the rule to have a coercive meaning.

However, the Board left open an opportunity for an employer to rebut the presumption by proving that the rule advances legitimate and substantial business interests that cannot be achieved with a more narrowly-tailored rule.

In overturning Boeing, the Board noted that the balancing test gave too much weight to employer interests, failed to consider the “economic dependency” of employees on the employer (i.e., employees would likely construe ambiguous work rules as prohibiting their Section 7 rights because they do not want to be disciplined or discharged), and unjustifiably categorized certain rules as always lawful.

The Dissent:

In dissent, Member Kaplan noted that it was the purported progeny of Lutheran Heritage – not Boeing – that departed from its standard by changing the test from whether an employee “would” construe to whether an employee “could” construe the rule as coercive. That is, both Boards would hold lawful a work rule even if the rule could be read to restrict Section 7 rights if a reasonable employee would not interpret it that way.  Thus, it was Boeing that was more faithful to Lutheran Heritage because both Boards gave considerable weight to an employer’s legitimate interests advanced by the rule in addition to its potential chilling effect on the exercise of employees’ Section 7 rights. Now, the Board’s new “hypervigilant” test will likely make many general rules (e.g., civility and decorum rules) unlawful because they theoretically could restrict Section 7 rights.


This decision likely will result in testing of employer policies through the filing of charges and more Board decisions applying the test. As we have noted in the past, pure handbook violations are seemingly minor, but can serve to block representation elections, overturn elections where the employer has prevailed, and otherwise chew up resources all without a discernible impact on employees. Employers should reevaluate their work rules to consider whether their rules could be interpreted to restrict Section 7 rights. Employers may also consider adding disclaimers for Section 7 activity; however, the Board has not yet considered the legal sufficiency of these safe harbor provisions in the context of this new standard. Accordingly, careful drafting of work rules is paramount to avoid such rules being found unlawful.

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Photo of Mark Theodore Mark Theodore

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice…

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice Group.

Some recent highlights of his career include:

  • Successfully defended client against allegations that it had terminated a union supporter and isolated another. T-Mobile USA, Inc., 365 NLRB No. 15 (2017).
  • Successfully appealed NLRB findings that certain of client’s written policies violated the National Labor Relations Actions Act.  T-Mobile USA, Inc., 363 NLRB No. 171 (2016), enf’d in part, rev’d in part 865 F.3d 265 (5th Cir. 2017).
  • Represented major utility in NLRB proceedings related to organizing of planners.  Secured utility-wide bargaining unit. Bargained on behalf of grocery chain.  After negotiations reached an impasse, guided the company through lawful implementation of five year collective bargaining agreement.
  • Coordinated employer response in numerous strike situations including a work stoppage across 14 western states of the client’s operations.

Mark has extensive experience representing employers in all matters before the NLRB, including representation petitions, jurisdictional disputes and the handling of unfair labor practice charges from the date they are filed through trial and appeal. Mark has acted as lead negotiator for dozens of major companies in a variety of industries, including national, multi-unit, multi-location, multi-employer and multi-union bargaining. Mark has handled lockout and strike situations, coordinating the clients efforts.

In addition, Mark has handled hundreds of arbitrations involving virtually every area of dispute, including contract interest arbitration, contract interpretation, just cause termination/discipline, benefits, pay rates, and hours of work.

Photo of Joshua Fox Joshua Fox

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several…

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several Major League Baseball Clubs in all aspects of the salary arbitration process, including the Miami Marlins, Boston Red Sox, Los Angeles Dodgers, Kansas City Royals, San Francisco Giants, Tampa Bay Rays and Toronto Blue Jays. In particular, Josh successfully represented the Miami Marlins in their case against All-Star Catcher J.T. Realmuto, which was a significant club victory in salary arbitration. Josh also represents Major League Baseball and its clubs in ongoing litigation brought by current and former minor league players who allege minimum wage and overtime violations. Josh participated on the team that successfully defended Major League Baseball in a wage-and-hour lawsuit brought by a former volunteer for the 2013 All-Star FanFest, who alleged minimum wage violations under federal and state law. The lawsuit was dismissed by the federal district court, and was affirmed by the U.S. Court of Appeals for the Second Circuit.

Josh also has extensive experience representing professional sports leagues and teams in grievance arbitration proceedings, including playing a vital role in all aspects of the grievance challenging the suspension for use of performance-enhancing drugs of then-New York Yankees third baseman Alex Rodriguez. Josh also has counseled NHL Clubs and served on the trial teams for grievances alleging violations of the collective bargaining agreement, including cases involving use of performance-enhancing substances, domestic violence issues, and supplementary discipline for on-ice conduct. He has played a key role in representing professional sports leagues in all aspects of their collective bargaining negotiations with players and officials, including the Major League Baseball, National Hockey League, the National Football League, Major League Soccer, the Professional Referee Organization, and the National Basketball Association,.

In addition, Josh has extensive experience representing clients in the performing arts industry, including the New York City Ballet, New York City Opera, Big Apple Circus, among many others, in collective bargaining negotiations with performers and musicians, the administration of their collective bargaining agreements, and in grievance arbitrations.

Josh also represents a diverse range of clients, including real estate developers and contractors, pipe line contractors, hospitals, hotels, manufacturers and public employers, in collective bargaining, counseling on general employment matters and proceedings before the National Labor Relations Board, New York State Public Employment Relations Board and arbitrators.

Josh has also recently served as an adjunct professor at Cornell University’s School of Industrial Labor Relations for the past two years, teaching a course regarding Major League Baseball salary arbitration.

Prior to joining Proskauer, Josh worked for a year and a half at the National Hockey League, where he was involved in all labor and employment matters, including preparations for collective bargaining, grievance arbitration, contract drafting and reviewing and employment counseling. Josh also interned in the labor relations department of Major League Baseball and at Region 2 of the National Labor Relations Board. He was a member of the Brooklyn Law Review and the Appellate Moot Court Honor Society and served as president of the Brooklyn Entertainment and Sports Law Society.