Jottings By An Employer's Lawyer

Tuesday, March 25, 2014

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

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:

  1. It is a violation of the NLRA to have a workplace rule that forbids discussion of confidential wage information between employees.
  2. 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.
  3. Because the clause covers financial information, including costs, that "necessarily includes wages and thereby reinforces that the rule proscribes wage discussion with outsiders."
  4. 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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