The National Labor Relations Board (“NLRB”) has been on a mission to extend its reach by applying the National Labor Relations Act (“NLRA”) to non-union employers. In pursuing this activist agenda, the NLRB has attacked common handbook provisions and employment policies addressing, among other things, social media use, workplace investigations, confidentiality, and employee behavior. In a surprising turn, a federal appeals court recently enforced one such decision of the NLRB.
In Flex Frac Logistics LLC v. NLRB, the Fifth Circuit upheld a decision of the NLRB that an employer’s confidentiality policy violated the provisions of the NLRA prohibiting employers from infringing on the rights of employees—both union and not—to engage in concerted protected activity for their mutual aid and protection.
The confidentiality policy at issue in Flex Frac prohibited employees from sharing or copying “confidential information” without prior management approval. The policy stated that unauthorized disclosure of confidential information could lead to termination or other legal action. For purposes of the policy, “confidential information” was defined to include not only sensitive business information and intellectual property, but also “personnel information and documents.”
The Fifth Circuit—generally viewed as an employer-friendly jurisdiction—enforced the NLRB’s order that the confidentiality policy was facially unlawful. The court noted long-standing precedent that workplace rules forbidding discussions among employees of their wages are per se invalid under the NLRA. Finding that employees could reasonably interpret the Flex Frac policy’s ban on disclosing personnel information as encompassing wage information, the court struck down the policy. In doing so, the court noted that no language in the policy excluded such subjects from its apparent reach.
This is not to say that employers cannot prohibit employees from disclosing confidential information, including confidential personnel information such as social security numbers and medical information. However, employers would be well-served to review their confidentiality policies to ensure that they cannot be interpreted to bar discussions of employee compensation and benefits.