Newsletter October 2023

October 29, 2023

DO I NEED TO CHANGE MY WORK RULES?


Employer Rules after Stericycle


If you have not heard, employers probably need to review their rules and policies because of an August
2 decision of the National Labor Relations Board, “NLRB.” Recall that the NLRB enforces the National
Labor Relations Act, which applies to almost all private (non-government) employers, whether or not
their workplace has been organized by a union.


The case that was decided involved a company, Stericycle, which maintained certain work rules
regarding:


 Personal phone use;
 Taking pictures or recordings at the workplace;
 Prohibiting conduct which could harm the reputation of the employer;
 Conflicts of interest; and
 Confidentiality requirements in retaliation cases.


The NLRB used this case to overturn the prior standards that were in place for determining the legality
of employer work rules. The new test it announced is that if an employee could reasonably interpret an
employer rule to restrict or prohibit Section 7 activity the rule is presumptively unlawful. The NLRB went
on in whimsical fashion to state that was the case even if a rule could be reasonably interpreted not to
restrict Section 7 rights, and even if the employer did not intend for its rule to restrict Section 7 rights.
An employer supposedly can rebut this presumption by proving that the challenged rule advances a
legitimate and substantial business interest and that the employer is unable to advance the interest with
a more narrowly tailored rule. Good luck with that!


So, what does this mean for employers? It means that if the NLRB somehow gets an employer’s rule in
front of it that it does not like, the employer will lose and be found to have committed an Unfair Labor
Practice. This is so whether or not the rule has ever been enforced. Mere maintenance of the rule is
enough.


While it is impossible to imagine all of the types of rules that the NLRB might find objectionable, the
following broad categories are most likely included:


 Any rule involving restrictions on an employee’s use of their personal cell phone.
 Any rule banning employees from taking pictures, or making recordings.
 Any rule prohibiting an employee from making adverse statements about a supervisor or the
company.
 Restrictions on what an employee may post on social media.
 Rules requiring confidentiality.
 Rules regulating conduct towards other employees.
 Rules restricting the use of company logos, copyrights, or trademarks.
 Rules relating to restrictions on leaving work.
 Conflict of interest rules.


For an employer with a workforce that is already represented by a union, the finding of merely
maintaining an unlawful rule might not result in anything more than having to cease maintaining the
rule and posting a Notice. However, for an employer with a workforce that is going through a union
organizing campaign, it is possible that the finding that a rule is an unfair labor practice could, at least in
theory, potentially overturn the results of a union election won by the employer, and lead to an NLRB
order to recognize the union as the bargaining representative in spite of the election results.


Accordingly, employers (especially with an unorganized workforce) should review their work rules and
ask if each rule is necessary, and whether the rule could be written more narrowly.


This ridiculous new standard is the result of the current presidential administration. It is similar to the
attack on employer rules that occurred under the Obama administration, but frankly, this new standard
is even more employer adverse. There will be legal challenges, but they will take years, so we are stuck
with this for the foreseeable future.

Recent Posts

BONUS PAYMENTS AND OVERTIME

January 15, 2026
A recent Opinion Letter from the Department of Labor, “DOL,” serves as a good reminder that incentive bonus payment usually must be included in an employee’s regular rate used to calculate overtime. The Opinion Letter dealt with an employer in the waste industry that paid drivers a bonus every pay period if certain safety and performance criteria (punctuality, attendance, and consistency in completing daily safety tasks) were met. Not surprisingly, the DOL found that the bonus amounts should be included in the regular rate of pay for overtime calculation purposes, because the payments were incentives and Discretionary Bonuses. Discretionary bonuses may be excluded from the regular rate of pay if: (1) the fact and amount of the payment are determined at the SOLE Discretion of the employer; (2) with the determination being made at or near the time of the period when the work was performed; and the payment must not be made pursuant to any prior contract, agreement, or promise causing the employee to expect such payments regularly. The payments in this case were made pursuant to a predetermined plan to incentivize work performance. A true Discretionary bonus which can be excluded from overtime is quite unusual. Accordingly, most bonus payments must be included in overtime calculations.

NON-COMPETES REVISITED BY THE FTC

October 28, 2025
As employers will recall, a federal court struck down the Fair Trade Commission’s (FTC) proposed ban on employee non-compete agreements over a year ago. The FTC has since abandoned its effort to enforce a rule completely banning such agreements. However, in September, the FTC surprised some by announcing that it intends to regulate the use of employee non-competes on a case-by-case basis. It seems that the FTC will consider whether the restrictions are “reasonable” by determining whether they are no greater than is necessary to protect the employer’s legitimate interests, balancing those interests against the hardship to the employee and public. Some factors that are likely to be considered are: The size of the company, both in terms of employees and business; Whether the employer requires non-competes of all employees, or only those with job duties that might justify their use to protect the employer’s interests; The scope of the geographic and time limitations contained in the non-competes. This “reasonableness” determination is very similar to the analysis that many state courts use in determining whether to enforce a non-compete. The FTC has announced its intention to put particular focus on employers in the healthcare space. However, all employers utilizing non-compete agreements should review the restrictions contained therein in an effort to determine that they appear reasonable under the above criteria.

AI CAN BE USEFUL...BUT BE CAREFUL USING IT TO SCREEN JOB APPLICANTS

August 20, 2025
A lawsuit was filed in 2023 in federal court in CA by a man alleging that he applied for many jobs at companies that utilize Workday’s platform, and that he was rejected for all, with many rejection emails coming within an hour of his application

TAXES ON OVERTIME AND TIPS: THE IMPACT OF LAST WEEK'S FEDERAL LEGISLATION

July 8, 2025
The federal law enacted last week provides some tax relief for employees who work overtime, and for those who receive tips. A summary is set forth below: Overtime Deduction An employee must receive OT pay as defined by the Fair Labor Standards Act (FLSA) (pay for hours worked beyond 40 in a workweek at a premium rate), and the deduction only applies to the premium portion of OT pay (the amount above the regular hourly rate). The deduction applies only to overtime compensation that is “required” under the FLSA. The deduction does not apply to overtime premiums that are not “required” by the FLSA, but instead are paid pursuant to contract (including a collective bargaining agreement), company policy, or because they are required under state law only. This is an above-the-line deduction, with the maximum deduction being $12,500 per year (up to $25,000 if married filing jointly). To be eligible for the full deduction, employees must earn $150,000 or less. Employers must include the total amount of qualified overtime compensation as a separate line item on the Form W-2. This will require employers to keep a distinct record of the overtime premium compensation that is both (a) required under the FLSA and (b) in excess of the regular rate. Tips Deduction To qualify for the deduction, the tips must be received by an individual engaged in an occupation that customarily and regularly received tips on or before Dec. 31, 2024, such as servers, bartenders, hotel staff, hairstylists, etc. To be considered a “qualified tip,” the amount must: (a) be paid voluntarily without any consequence in the event of nonpayment; (b) not be the subject of negotiation; and (c) be determined by the payor. Thus, for example, a mandatory service charge imposed by the employer for a banquet will not qualify for the deduction, and neither will a required gratuity that a restaurant adds automatically to a bill for large parties. Failing to make this distinction may lead employees to claim deductions to which they are not entitled. This is also an above-the-line deduction, with a cap of $25,000 per year. To be eligible for the full deduction, employees must earn $150,000 or less. The act requires employers to include on Form W-2 the total amount of cash tips reported by the employee, as well as the employee’s qualifying occupation. For 2025, the act authorizes the reporting party to “approximate” the amount designated as cash tips pursuant to a “reasonable method” to be specified in a forthcoming regulation by the Treasury secretary.

EMPLOYEES ARE NOT ENTITLED TO TAKE FMLA LEAVE TO CARE FOR A SIBLING, RIGHT?

February 6, 2025
The FMLA contains specific provisions allowing eligible employees to take leave “to care for the employee's spouse, son, daughter, or parent with a serious health condition.” In December, the 6th Circuit Court of Appeals, which is the Federal Appellate Court for the above states, issued an opinion finding that an employee might be entitled to take FMLA leave to care for her sick sister. The language of the FMLA is crystal clear as to family members for which an employee may take FMLA leave to care for. Notwithstanding that, the court found that the in loco parentis (in the place of a parent) language in the FMLA’s definition of ‘Parent” and “Son or Daughter” showed that “Congress sought to protect parental relationships, whether biological, legal, or their functional equivalents.” So, the court sent the case back to the lower court to determine whether the employee in question had an “in loco parentis” relationship with her sister. If so, the employee would be entitled to FMLA leave to care for the sister. This nonsensical interpretation of the FMLA by court leaves employers in the above states with great uncertainty as to what to do if an employee requests FMLA leave to care for a sibling. Under the court’s skewed reasoning, the employer would have to determine whether an employee requesting such leave actually stood in loco parentis with the sibling. An employer facing such a request should consult with an HR or legal professional.