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NLRB Issues New Limits on Workplace Rules

The National Labor Relations Board adopted new standards that it will use to assess whether an employer’s work rules impact a worker’s National Labor Relations Act (NLRA) Section 7 rights. Section 7 precludes employers from interfering with, restraining, or coercing employees in their right to engage in “concerted activities” regarding their working conditions. In a Board decision issued on August 2, employers must ensure policies and rules do not have a "reasonable tendency" to dissuade workers from exercising this Section 7 right. The decision reverses standards implemented during the Trump presidency. That standard said the Board would evaluate and balance two factors: the nature and extent of the impact on NLRA rights against the employer's legitimate business justifications. In addition, the Board would consider certain categories of rules always lawful.

The current Board found that the Trump-era standard allowed employers to “adopt overbroad work rules that chill employees’ exercise” of their Section 7 rights because it “fails to account for the economic dependency of employees on their employers.” The new standard requires a case-by-case standard to determine whether the challenged work rules violate the employees' rights. First, the employee must show the challenged rule has a "reasonable tendency" to violate their rights. If they can establish that, then that rule is presumptively unlawful. The employer can rebut this presumption by showing the rule advances a legitimate and substantial business interest, and the employer cannot construct a more narrowly tailored rule. Where the employer meets that standard, the NLRB will consider the rule lawful. This new framework will apply retroactively.