Continuing a recent trend, the National Labor Relations Board (NLRB) has found another employer's confidentiality/information security policy to be in violation of the National Labor Relations Act (NLRA), based on its determination that the policy could have had a chilling effect on the exercise of employees' Section 7 rights to discuss the terms and conditions of their employment.

In Fresh & Easy Neighborhood Market and United Food and Commercial Workers International Union, 361 NLRB No. 8 (July 31, 2014), Fresh & Easy maintained a "Confidentiality and Data Protection" policy that, in relevant part, included the following list of “Do’s” and “Don’ts”:

DO

  • Make sure any customer or staff information you collect, is relevant, accurate and, where necessary, kept up to date. Keep it no longer than necessary.
  • Keep customer and employee information secure. Information must be used fairly, lawfully and only for the purpose for which it was obtained.
  • Ensure that data is appropriately and securely stored and disposed of. Be aware of the risk of discussing confidential information in public places.

DON'T

  • Release information, without making sure that the person you are providing it to is rightfully allowed to receive it and, where necessary, that it has been encrypted in accordance with Fresh & Easy policy.

In a complaint filed against Fresh & Easy, the General Counsel for the NLRB took the position that the requirements that employees "keep . . . employee information secure" and only use such information "for the purpose for which it was obtained" were overbroad and improperly infringed upon employees' Section 7 rights to discuss the terms and conditions of their employment with each other and third parties (e.g., unions). Specifically, the General Counsel argued that employees could reasonably interpret the quoted language as restricting their ability to discuss wages and working conditions for the purpose of engaging in concerted activity.

Disputing the General Counsel's interpretation of its policy, Fresh & Easy argued that the language at issue had to be read in its proper context, as a part of its "Code of Business Conduct," a 20-page web-based manual focused on "ethical matters," and not focused on terms and conditions of employment, as in the case of an employee handbook. In a 2-1 decision, the NLRB rejected Fresh & Easy's argument and deemed the challenged policy unlawful. According to the Board, the policy impermissibly suggested that all employee information was subject to the restrictions on disclosure, which could reasonably be interpreted by employees as including terms and conditions of employment.

This decision serves as a reminder that employers' efforts to maintain confidentiality in the workplace remain under constant attack in the current environment, in which the Board continues to seek new and innovative ways to expand the reach and the application of the NLRA.