The National Labor Relations Board has long held that employers cannot prohibit employees from sharing salary information among themselves. Last month, the Fifth Circuit Court of Appeals upheld an expanded NLRB ban on policies that prohibit such discussions with persons outside of the company. Flex Frac Logistics, LLC v. NLRB involved an appeal of an NLRB decision declaring a company confidential information policy in violation of Section 8(a)(1) of the NLRA.

The policy in question prohibited employees from discussing a variety of things outside of the company, including “personnel information and documents.” The plaintiffs alleged that this prohibition violated their rights to engage in concerted activity about terms and conditions of employment including wages. The company contended that employees regularly discussed wages among themselves and that the prohibition on outside disclosures was consistent with NLRB precedent.

The Fifth Circuit disagreed, finding the policy to be an unfair labor practice. Prohibiting discussion of salaries among employees and third parties consulted for purposes of possible concerted activity violates NLRA protections on employee conduct. Employers should review their internal policies as well as employment agreements with any non-management employees to determine if their confidential information protection provisions extend beyond permissible boundaries. At a minimum, the policies should include a disclaimer stating that they will not be interpreted or enforced to infringe on employee rights to organize or to engage in concerted activity.