Friday, March 28, 2014

NLRB Says “No Workplace Secrets Allowed!”



The National Labor Relations Board (“NLRB”) has held that an employer’s enforcement of a commonly used workplace policy could expose the employer to liability under the National Labor Relations Act (“NLRA” or “the Act”).
This particular matter involved the technology company MCPc, which had a confidentially provision in its employee handbook which read. In part, as follows:

[D]issemination of confidential information within [the company], such as personal or financial information, etc., will subject the responsible employee to disciplinary action or possible termination . . . .


This type of policy, in one form or another, is commonly utilized by many employers.  In the case of MCPc, the company fired an employer after he announced at a meeting that the salary paid to a particular executive, stating the specific amount of the executive’s compensation, would have been used to hire additional engineers.  In terminating the employee for his statements, MCPc also based the decision on the employee improperly accessing computer files to discover the executive’s salary.
Last month, the NLRB upheld an administrative law judge’s decision, finding that MCPc’s internal confidentiality policy was overbroad and violated The NLRB held that this language violated Section 8(a)(1) of the NLRA because employees would reasonably construe the overbroad rule to prohibit discussion of wages or other terms and conditions of employment with their coworkers.  In upholding the ruling against MCPc for the termination of the employee, the NLRB agreed that the employee’s discussion was protected discussion because it involved the terms and conditions of his employment, i.e. staffing shortages.

In recent years, the NLRB has used the same rationale to find many employers’ social media policies to be in violation of the Act.  Another lesson to remember from the NLRB’s assault on workplace social media policies is that an employer can be found in violation on the basis of an overbroad policy alone, even if there is no action taken against an employee for violation of the policy.  As many employers also learned from the NLRB’s social media focus, even non-union employers can be found in violation of the NLRA.

Where does this leave employers?  As mentioned above, many employers have similar policies in their employee handbooks.  This is often for the purpose of avoiding the inevitable bickering and complaints that arise when employees start comparing their respective salaries, and are aggrieved over their perception of being underpaid, or another employee being overpaid.  Unfortunately, that goal is exactly what the NLRB views as a violation.
From the perspective of the NLRB’s “bigfoot” approach in the area of social media policies, I think employers are ultimately going to have to scrap the broadly worded confidentiality policies, and opt instead for narrowly tailored policies that protect against the disclosure of trade secrets and other confidential or proprietary information.

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLC, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijmanm@phelps.com