The National Labor Relations Board has ruled that employers may not take adverse employment actions against employees who breach confidentiality clauses when the clauses are illegally overbroad. In Northeastern Land Services Ltd., the employer (“NLS”) was a temp agency whose standard employment contract had a confidentiality clause prohibiting employees from disclosing their terms of employment with the agency (including compensation) to “other” parties. Violation of the clause was punishable by dismissal. One of the agency’s employees, Jamison Dupuy, had a dispute about his compensation. While on assignment, Dupuy disclosed the dispute to a third party and sought its intervention on his behalf. NLS fired Dupuy for violating his confidentiality obligations.
Under NLRB precedent, work rules may not prohibit employees from engaging in “protected” activities such as discussing terms and conditions of employment for “mutual and or protection.” Further, even work rules that do not directly prohibit employees from engaging in protected activities may still violate the NLRA if an employee would reasonably construe the rule to prohibit protected activity.
In this case, the NLRB held that Dupuy could have reasonably construed NLS’s confidentiality clause as prohibiting “protected” discussions because it forbade disclosure to “other parties,” a characterization far too broad since other parties could include union representatives. Because the confidentiality clause was illegally overbroad, Dupuy’s termination was unlawful.