Do Your Confidentiality Policies Pass NLRB's Expanding Standards?

by Perkins Coie
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The National Labor Relations Board, the agency that enforces federal labor law, continues to challenge employer policies that seek to impose confidentiality constraints on employees.  This is unlikely to change now that the Senate has confirmed President Obama’s nominations for all five members, bringing the NLRB to full strength for the first time in years.  Dominated 3-2 by Democrats, the NLRB is widely expected to continue to expand the reach of federal labor law into nonunion settings and to strike down rules of conduct that could be interpreted to interfere with those rights.  Of particular concern to employers is the NLRB’s approach to confidentiality policies.

This update explains how federal labor law protects virtually all nonsupervisory workers and what the implications are for employer rules of conduct.

Background

The centerpiece of federal labor law is the National Labor Relations Act (the Act), passed in 1935 as part of the Great Depression's New Deal.  Expressly designed to promote collective bargaining, Section 7 of the Act protects employees who engage in union activities.  Section 7, however, is not limited to union activities.  It broadly protects employees who engage in “other concerted activities for the purpose of . . . mutual aid or protection,” whether or not a union is involved.  Collectively, these rights are referred to as “Section 7 rights.”

The NLRB has even created a public page on its website devoted to the protection of concerted activities: www.nlrb.gov/concerted-activity.

An employer that interferes with the exercise of these rights commits an unfair labor practice and can be ordered to stop interfering and to compensate injured employees for any loss of wages or benefits.

Rules of Conduct

It has long been established that employer rules of conduct interfere with Section 7 rights in four different circumstances:

  • When the rule expressly forbids activity protected by Section 7.  An example is a rule that prohibits employees from all solicitations at work.  This is unlawful because employees have the right to solicit fellow employees at work for union and other concerted activities.  Similarly, a rule that prohibits employees from discussing their compensation is unlawful on its face because employees have the Section 7 right to discuss pay and benefits.
  • When the rule, although lawfully phrased, is in fact applied to interfere with Section 7 activities.  For example, if the employer applies a lawful rule prohibiting solicitations during working time to an employee who was soliciting during a rest or lunch break, that would be unlawful.
  • When the rule is adopted to interfere with current union activities.  For example, if the employer had no rule concerning employees distributing written material at work, it would not be lawful to adopt a rule restricting that activity if a union organizing drive has already started, even though the rule itself would otherwise be permissible.
  • When the rule, although not expressly prohibiting protected activity, would reasonably be interpreted by employees as curtailing such activity.

It is in this last area where the NLRB has been the most active in recent years, finding unlawful such things as overly broad confidentiality policies, overly restrictive social networking policies and overly broad civility rules.

Rules the NLRB Found Unlawful

Here are a few illustrative examples of rules the NLRB has found unlawful:

  • Prohibiting the discussion of “private matters” of other employees;
  • Prohibiting the dissemination of “confidential” information such as employees’ names, addresses and telephone numbers;
  • Prohibiting social media postings that “damage the Company” or “damage any person’s reputation;” and
  • Prohibiting “disrespectful” or “other language which injures the image or reputation” of the employer.

The NLRB’s General Counsel - the official who prosecutes unfair labor practices - appears to take an even more expansive view.  In his most recent pronouncement, he concluded that the following social media rule was illegal:

"You have an obligation to protect confidential, non-public information to which you have access in the course of your work.  Do not disclose . . . any confidential information about the Company or any related companies . . . or about other [employees], customers, suppliers or business partners."

The General Counsel reasoned that the term “non-public information” was so vague that employees would reasonably construe it to include subjects that involve their working conditions.  Likewise, the term “confidential information” would reasonably be interpreted to include information concerning terms and conditions of employment.  Therefore, the General Counsel concluded that, unless the company settled the charges and revised the rule, an unfair labor practice complaint would be issued against it.

The same case also concerned language stating:

"Do not use any . . . photographs or video of the Company’s premises, processes, operations, or products, which includes confidential information owned by the Company . . . ."

The General Counsel argued that this was unlawful because it would reasonably be interpreted to prevent employees from using social media to communicate and share information regarding their Section 7 activities through pictures or videos, such as of employees engaged in picketing or other concerted activities.

The rule in question also prohibited the use of any company “logo, trademark, or graphics.”  The General Counsel easily found that language to be illegal based on established law that employees may use their employer’s logo and trademarks when engaging in Section 7 activities such as displaying them on leaflets, picket signs and the like.

Takeaways for Employers

Merely maintaining an unlawful rule is a violation even if it has never in fact been applied to restrict any Section 7 activity.  So, when drafting rules of conduct addressing such things as confidentiality and civility, be careful not to use broad, general prohibitions. 

Be specific and list examples of unacceptable behavior so that a single word will not be read in isolation.  The value of this approach is illustrated by another recent case, in which the General Counsel reviewed a comprehensive ethics policy that contained the following passage:

"Employees will not engage in conduct or activity that may raise questions as to the company’s honesty, impartiality, reputation or otherwise cause embarrassment to the company."

If this language had been the sole policy statement, the General Counsel could well have found it unlawful because many Section 7 activities could arguably raise questions about an employer’s honesty and cause embarrassment to it.  However, because the policy contained an extensive discussion of improper actions such as bribery, antitrust violations, insider trading and the like, the General Counsel concluded that employees would not reasonably construe the language as restricting Section 7 rights.

The same should be true for confidentiality policies that are limited to specific kinds of information the employer has the right to keep secret.  For an example of a social media policy with confidentiality provisions that passed muster with the NLRB’s General Counsel, please click here.  Consult counsel if you wonder if your confidentiality policies will pass muster with the expanding reach of the NLRB.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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