The National Labor Relations Board recently issued a somewhat surprising decision that provides useful guidance to employers facing employee misconduct. In Flex Frac Logistics, LLC, the Board found that an employee's discharge for breaching the employer's confidentiality policy was lawful, despite the Board's finding that the confidentiality policy was unlawful.
In a prior decision, the Board found that the confidentiality policy was unlawfully overbroad because it prohibited or could be interpreted to prohibit employees from discussing wages, hours and other terms and conditions of employment. We have previously discussed with you the Board's aggressive enforcement stance with respect to employer policies of all types. As part of that prior decision, the Board remanded to an Administrative Law Judge ("ALJ") the question of whether the employee's termination pursuant to the confidentiality policy was also unlawful.
The ALJ held, and the Board affirmed, that the employer did not violate the National Labor Relations Act when it discharged the employee. Discipline pursuant to an unlawful policy is only unlawful if the employee violated the rule by engaging in protected activity under the Act, or by engaging in conduct that otherwise implicates the concerns underlying the Act. The Board found that even though the employee's conduct implicated the concerns underlying the Act, her discharge was lawful because the employee deliberately betrayed the employer's strong, expressly articulated confidentiality interests.
The Board noted that there was no dispute that the employer had a legitimate business interest in maintaining the confidentiality of the rates it charged its customers, and that the employer was harmed by the employee's disclosure of that information. The Board found that it was clear that the employee was not discharged for engaging in protected activity but was instead discharged for deliberately violating the confidentiality policy. Importantly, the Board noted that the employer cited the employee's interference with its operations as the reason for her discharge.
This decision was surprising to us given the Board's strong defense of employee rights under the Act. But, as was previously discussed, there are some limits to the protections of the Act. The Flex Frac decision has a good discussion of the types of misconduct that will not be protected by the Act, even if the employer relied on an unlawful policy in taking disciplinary action against the employee.
Although helpful, employers should still work to ensure that their policies will withstand scrutiny under the Act, and that any disciplinary actions are carefully vetted for compliance.