By Anne-Marie L. Storey, Esq.
This is a follow-up to our recent Lunch & Learn, during which we discussed the application of Sections 7 and 8 of the NLRA to non-unionized employers. In a recent decision from the 7th Circuit, the court addressed a confidentiality provision in an employer’s handbook and determined that the section violated the NLRA because it unlawfully restricted the ability to discuss wage information.
Under Section 8(a)(1) of the NLRA, it is “an unfair labor practice for an employer . . . to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title.” Those protected rights include engaging “in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” The NLRB has previously held that a workplace rule which restricts or forbids discussion of confidential wage information between employees may violate the NLRA. Even when the restriction is not explicit, the rule can still violate the Act if employees would reasonably construe the language to prohibit Section 7 activity, the rule was promulgated in response to union activity, or the rule has been applied to restrict the exercise of Section 7 rights.
This employer’s confidentiality rule stated that: 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; [Employer] 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 [Employer] 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.
The NLRB found that this rule did violate the Act and that finding was affirmed by the 7th Circuit Court of Appeals. The court noted that the confidentiality clause was broad enough that although it did not specifically mention wages, it inferred that such information was included by referring to “personnel information”.
Along with the information we provided at the Lunch & Learn, this case is demonstrative of the types of policies that may violate the NLRA, even for non-unionized employers. You are encouraged to review your policies for such potential violations; if you have questions about specific language for such policies, please feel free to call us.
These materials have been prepared by Rudman Winchell for educational purposes only. They should not be considered legal advice. The transmission of this information to you is not intended to create a lawyer-client relationship. Readers should not act upon this information without seeking professional counsel. You should not send any confidential or private information to Rudman Winchell until a formal attorney-client relationship has been established, in writing.