June 4, 2013
The National Labor Relations Board (NLRB or Board) continues its pursuit of employee handbooks and employment contracts in a series of recent decisions examining the lawfulness of confidentiality and alternative dispute resolution (ADR) policies and agreements under the National Labor Relations Act (NLRA).
As it previously did with at-will disclaimers, social media policies and what the NLRB dubbed “blanket” confidentiality requirements related to internal company investigations, the Board is now striking down various confidentiality requirements as “overly broad” and restrictive of employees’ right to engage in protected concerted activity under the NLRA. It is targeting unionized and non-unionized employers alike.
Section 7 of the NLRA affords non-supervisory employees the right to, among other things, discuss their terms and conditions of employment and to file charges with and access the processes of the NLRB. The NLRB has long held that a confidentiality provision containing an express prohibition on employees’ discussing or divulging to third parties information regarding the terms and conditions of their employment violates the NLRA. While this may be a simple enough rule to understand, the Board has muddied the waters by prohibiting employers from maintaining any work rule, including confidentiality and arbitration rules, that an employee would “reasonably construe” as restrictive of Section 7 rights.
Recent NLRB Decisions
In DirecTV U.S. DirecTV Holdings LLC, 359 NLRB 54, a case decided earlier this year, the NLRB struck down an employer’s confidentiality policy that prohibited employees from discussing the details of their jobs, company business or work projects with anyone outside the company. Employees were also instructed never to give out information about DirecTV customers or employees and were informed that “company information,” which included “employee records,” was confidential.
The NLRB struck down this policy as overly broad, saying that employees would reasonably understand the policy as restricting discussion of their wages and other terms and conditions of employment. The board took particular issue with the term “employee records,” noting that the phrase was undefined in the policy and, as such, could reasonably be construed by employees as prohibiting discussion or disclosure of, among other matters, wages, discipline and performance ratings.
Also factoring into the decision was the absence of a specific exemption for protected communications with third parties, such as union representatives, NLRB agents, or other governmental agencies concerned with workplace matters. The Board warned that the inclusion of legitimate items in the confidentiality policy, such as prohibiting disclosure of information about customers, would not prevent a finding of over-breadth, and that any ambiguity would be resolved against the employer.
In Supply Technologies, 359 NLRB 35, the Board similarly evaluated and struck down an ADR provision in an employment agreement as overly broad. The agreement required employees, including non-supervisory personnel, to engage in ADR for all disputes related to their employment, with the sole exceptions of criminal, workers’ compensation and unemployment matters. Despite this broad language, the agreement went on to clarify that employees were permitted to file a charge or complaint with government agencies and were free to cooperate with a government agency investigating a charge or complaint. Even with the inclusion of this narrowing language, the NLRB nevertheless held that employees would reasonably construe the agreement to prohibit the filing of unfair labor practice charges or otherwise accessing the NLRB’s processes and, therefore, the agreement was overly broad and unlawful.
Recommendations for Employers
Employers and their employment counsel will no doubt continue to struggle with the question of whether current or future workplace rules and employment agreements would reasonably be construed by employees as restrictive of Section 7 rights. However, recent NLRB decisions do offer some guidance related to certain items that will be deemed overly broad.
Regarding confidentiality policies and agreements, employers should be as specific as possible when defining what their company considers confidential. Instead of using general language – such as “all company documents and information” – employers must specify which company documents and what particular information is considered confidential. Never include language that would prohibit employees from discussing their wages, salaries or other terms and conditions of employment with one another or with outside third parties. Furthermore, wholesale requirements that employees obtain authorization from their employer before speaking with the media or making public comments about the company under any circumstances, even if promulgated with the sole intention of protecting confidential information rather than infringing on Section 7 rights, will be deemed overly broad.
Where employers maintain agreements with ADR provisions, such as agreements that require mandatory arbitration of disputes, a carve-out should be included clarifying that controversies, claims and disputes properly made or brought pursuant to the NLRA are excluded. The agreement should also contain language in which the employee acknowledges that nothing therein restricts the employee’s right to file unfair labor practice charges or otherwise access the processes of the NLRB. The board has also made clear that the inclusion of a “savings clause” in an overly broad policy or agreement will, in and of itself, typically be insufficient to prevent a finding of unlawfulness. Still, it remains prudent to include language clarifying that the policy or agreement is not intended to, nor will it, be enforced in a manner so as to interfere with or restrict an employee’s ability to exercise his or her Section 7 rights.
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