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Non-Union Employer’s Confidentiality Rule Held To Violate The National Labor Relations Act

The National Labor Relations Board (“NLRB”) continues its challenge to non-union employers’ policies and operations, in this case attacking common confidentiality policies. One non-union employer maintained a typical confidentiality rule that read as follows:


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; [Company] organization 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 [Company] 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 ruled that this policy unlawfully infringed on employees’ right to engage in concerted protected activities protected under section 7 of the National Labor Relations Act (“NLRA”). The Fifth Circuit Court of Appeals, in New Orleans, affirmed the NLRB’s decision in

Flex Frac Logistics v. NLRB , 2014 U.S. App. LEXIS 5429 (5th Cir. 2014), reasoning that a workplace rule that forbids discussion of confidential wage information between employees violates the NLRA.


Here, the employer’s rule did not explicitly forbid such discussion.  Nonetheless, the court held that it nevertheless violates the NLRA as “employees would reasonably construe the language” of the rule to prohibit Section 7 activity because the clause covers financial information, including costs, that “necessarily includes wages and thereby reinforces that the rule proscribes wage discussion with outsiders.”