In a 2-1 decision with Board Member Philip Miscimarra dissenting, the National Labor Relations Board recently held that Philips Electronics North America Corp. violated Section 8(a)(1) of the National Labor Relations Act by having an unwritten confidentiality rule prohibiting employees from discussing their disciplinary records.  Philips Electronics North America Corp., 361 NLRB 16 (August 14, 2014).  The Company argued that it  did not have a policy prohibiting employees from discussing discipline issues.  However, the majority of the Board found that documentation in an employee’s discharge file “effectively admitted” that the Company maintained an unwritten rule prohibiting employees from discussing discipline they had received.

The case arises from the discharge of Lee Craft in January 2012.  Prior to his discharge, Craft was placed on a final written warning because of his performance deficiencies, and disruptive, intimidating, and offensive behavior toward a female co-worker, Kim Coleman.  Craft was instructed to stay away from Coleman and her work area.

Instead, Craft drove his forklift to Coleman’s area and complained in a loud voice to co-workers that he had been disciplined because of Coleman’s allegations of harassment against him and showed co-workers the disciplinary form.  Co-workers confirmed that Craft had shared that he had been disciplined because of complaints by Coleman.

The Company fired Craft for “disrupting the operation, and sharing confidential documentation and information during working hours and continu[ing] to use intimidating language towards management.”  The disciplinary memo completed by the manager indicated that employees “are aware that disciplinary action forms are confidential and should not be shared on the warehouse floor at any time.”

Craft filed an unfair labor practice charge challenging his discharge.  An NLRB Regional Director issued a complaint alleging that the discharge violated the NLRA, and that the Company maintained an illegal policy prohibiting the discussion of employee discipline.

The Administrative Law Judge dismissed the Complaint, but the Board reversed in part.  While the Board upheld Craft’s discharge finding he would have been terminated regardless of sharing his disciplinary record, the Board found the Company violated Section 8(a)(1) by maintaining the unwritten confidentiality rule prohibiting employees from discussing discipline.  The Board explained that under established NLRB precedent, “[a]n employer violates Section 8(a)(1) when it prohibits employees from speaking with coworkers about discipline and other terms and conditions of employment absent a legitimate and substantial business justification for the prohibition.”  In justifying its finding of a violation, the Board stated: “It is difficult to see how the Respondent can claim that such a [confidentiality] rule did not exist and at the same time cite Craft for violating it.”

Board Member Miscimarra dissented finding that the record lacked sufficient evidence of the unwritten confidentiality policy, particularly in light of the unrebutted testimony from Company witnesses that no such policy existed.

This decision is an important cautionary tale that the Board will look not only at employer policies in an employee handbook, but also employer practices and any documentation in an employer’s records to determine if an employer is maintaining illegal policies.  Employers must be vigilant in their review of employee handbooks, and just as importantly, train managers and supervisors in the field on the legal limitations concerning confidentiality rules and other employer policies.  At the very least, managers and supervisors need to be aware that they must think carefully before disciplining an employee and creating documentation  evidencing a violation of an unspoken rule.