NLRB Strikes Down “Overbroad” Confidentiality Agreement
As an employment lawyer, I have had the opportunity to review hundreds of confidentiality and non-disclosure agreements. Although there are invariably differences from one agreement to the next, virtually all have at least one thing in common- the inclusion of “employee information” within the description of information to be kept confidential. Such “employee information” typically includes, among other things, salary and pay rates, incentive compensation structures, and disciplinary or investigatory matters.
Over the past few years, the National Labor Relations Board (the Board) has increasingly sought to protect both unionized and non-unionized employees’ rights under Section 7 of the National Labor Relations Act (NLRA), which provides that all employees have the broad right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.” For example, the Board has found that Section 7 rights are impinged by policies that require employees to be courteous, refrain from discussing internal investigations, prohibit employees from disparaging or defaming the employer, and prohibit gossip and negativity in the workplace. (click here for a compilation of NLRB-published information pertaining to social media policies and the use of Facebook and Twitter by employees).
Recently, the Board added standard confidentiality agreements to the growing list of employer policies it has found to violate Section 7, by invalidating a handbook policy that prohibited employees from disclosing or using “for his or her own benefit or the benefit of others, either during or after employment, employer information including “human resources related information” and information pertaining to “investigations by outside agencies.” This policy, the Board found in Battle’s Transportation, Inc., was overbroad because employees “would reasonably construe those phrases to encompass terms and conditions of employment or to restrict [them] from discussing protected activity, such as Board complaints or investigations. The Board also found a company directive that prohibited employees from discussing company business with company clients to be unlawfully vague and overbroad, because “employees would reasonably construe this prohibition to restrict discussion about union-related matters.”
Although the Battle’s Transportation workplace is unionized, it is likely that the Board would similarly strike down an “overbroad” confidentiality agreement within a non-unionized workplace. Although the fight is far from over, it may make good practical sense to review and modify policies now, before the NLRB comes calling.