Wednesday, March 26, 2014

Fifth Circuit Agrees Employer's Confidentiality Policy Violates NLRA

In a decision issued this week, the Fifth Circuit upheld and enforced a National Labor Relations Board (NLRB) order finding that a portion of a  non-unionized employer's confidentiality policy violated the National Labor Relations Act because it was overly broad and contained language employees could reasonably interpret as restricting the exercise of their Section 7 rights.  See Flex Frac Logistics, L.L.C. v. National Labor Relations Board, No. 12-60752 (Mar. 24, 2014). 

The employer's confidentiality policy included the following language:

"Confidential information includes...personnel information and documents..."

The NLRB found that even though the clause did not reference wages or the specific terms or conditions of employment, the clause nevertheless violated the NLRA.  In reviewing the NLRB's order, the Court reiterated that a workplace rule that forbids the discussion of confidential wage information between employees violates the NLRA.  Confronted with the employer's argument that the clause in question did not reference wages, the Court nevertheless determined that employees would "reasonably construe" the clause to prohibit wage discussions, and went so far as to note that the clause did not except out wages from its scope.

This decision underscores the importance of regular handbook reviews to ensure compliance with the NLRB's growing list of prohibited policies.