How Disruptive Can an Aggressive NLRB Be in a Non-Union Setting? More Than You Might Think

Posted 10:36 AM by Michael Fox

If you are a non-union employer (and overwhelmingly most employers are) you might not have given much thought to your how your confidentiality policy stacked up against the National Labor Relations Act. In fact your policy might read something like the following:

Confidential Information

Employees deal with and have access to information that must stay within the Organization. Confidential Information includes, but is not limited to, information that is related to: our customers, suppliers, distributors; [Company] organization management and marketing processes, plans and ideas, processes and plans, our financial information, including costs, prices; current and future business plans, our computer and software systems and processes; personnel information and documents, and our logos, and art work. No employee is permitted to share this Confidential Information outside the organization, or to remove or make copies of any [Company] records, reports or documents in any form, without prior management approval.Disclosure of Confidential Information could lead to termination, as well as other possible legal action.

But if it does, then according to the NLRB, now buttressed by the 5th Circuit Court of Appeals, you are in violation of the NLRA because that policy infringes on employees Section 7 rights. Flex Frac Logistics v. NLRB (5th Cir. 3/24/14).

The 5th Circuit review of the Board's decision finding a violation is straightforward:

It is a violation of the NLRA to have a workplace rule that forbids discussion of confidential wage information between employees.
The rule above does not explicitly do that, but it is also a violation if "employees would reasonably construe the language to prohibit Section 7 activity.
Because the clause covers financial information, including costs, that "necessarily includes wages and thereby reinforces that the rule proscribes wage discussion with outsiders."
And the rule makes no attempt exclude some personnel information such as wages, which might make it pass muster.

And less you think this is the opinion of some of the newer members of the 5th Circuit who might have a more liberal bent, the opinion is authored by Chief Judge Stewart and joined by Judges Higginbotham and Jones.

Confidentiality clauses are just one area of personnel policies that the new NLRB is putting under strict scrutiny. All employers, but particularly non-union employers, need to realize that there is a new entity around, and that not all its actions will be upended by the courts.

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Monday, March 10, 2014

5th Circuit Short Circuits Plaintiff's Use of State Court

Posted 7:20 PM by Michael Fox

In certain parts of Texas, plaintiffs seek to avoid being in federal court at all costs. Today, the 5th Circuit clarified a procedural hurdle to that tactic in a small category of cases.

In Taylor v. Bailey Tool & Manufacturing (5th Cir. 3/10/14), plaintiff originally filed suit in state court alleging only violations of the Texas anti-discrimination statute. Unfortunately, for the plaintiff, the claim was not timely filed. Later plaintiff amended to add Title VII and a Section 1981 claim.

Defendant removed and moved to dismiss arguing all claims were untimely. Both parties agreed that the state claims were untimely. Both parties also agreed that whether the federal claims were timely depended on whether Federal Rule of Civil Procedure 15(c) or the Texas relation back rule, TEX. CIV. PRAC. & REM. CODE ANN. § 16.068 applied.

If Rule 15(c) applied, the federal claims, even though filed after the federal statute of limitations would be timely because they would relate back to the filing of the original claim. On the other hand, if the Texas rule applied, they would not be timely because § 16.068 prohibits relation back if the cause of action would have been subject to a plea of limitation when filed.

The 5th Circuit joined the two other circuits (the 6th and 9th) that had ruled on this matter, holding that the state rule applied, thus barring the claim.

The net result is that plaintiffs will have to make sure that their state claim is timely if they want to avoid federal court.

A simple and straight forward, but important, holding.

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How Much Would it Take to Wet Your Whistle?

Posted 12:55 PM by Michael Fox

That's a 64 million dollar question, literally. JP Morgan whistleblower gets $63.9 million in mortgage fraud deal.

It seems quite likely that headlines like that are apt to make many think that rather than continuing to work as an assistant vice president, as Keith Edwards did before reporting that JP Morgan was submitting mortgages for FHA and VA approval that did not qualify, and apparently not notifying the government that its own internal review had disclosed the problem, that it might make sense to play a new version of the lottery.

Couple that with the Supreme Court's decision last week expanding the reach of yet another major whistle-blowing statute, Supreme Court Exapnds Scope of Sarbanes-Oxley Whistleblower Liability, and employers and their counsel just have more to think about.

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