Thursday, May 17, 2007

Silence is not always golden - confidentiality policies may violate NLRA

The National Labor Relations Act makes it unlawful for an employer, in a union or non-union shop, to interfere with, restrain, or coerce employees exercising their right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection. One such protected activity is discussing terms and conditions of employment. In Cintas Corp. v. NLRB, the United States Court of Appeals for the D.C. Circuit upheld a ruling by the National Labor Relations Board that Cintas’s corporate confidentiality policy violated the Act because employees could construe the policy to prohibit discussions of wages or other terms and conditions of employment.

Cintas’s policy, contained in its employee handbook, stated: "We honor confidentiality. We recognize and protect the confidentiality of any information concerning the company, its business plans, its partners, new business efforts, customers, accounting and financial matters." Cintas used to the term "partners" synonymously with "employees." The quoted language is typical of corporate confidentiality policies. Furthermore, while the policy stated that a violation of the policy could result in discipline, Cintas had never disciplined any employees for discussing wages or other terms and conditions of employment.

The Court determined nevertheless that the mere maintenance of such a policy violated the Act. It reasoned that because employees could reasonably believe that the policy forbids any discussion of terms and conditions of employment, a reasonable interpretation of the policy could have a chilling effect on employees.

Thus, to be lawful under the NLRA corporate confidentiality policies must be sufficiently limited by specific context or language so as to be clear to employees that the rules do not restrict their rights to discuss the terms and conditions of employment. The Court provided as an example of a lawful policy one that is limited only to disclosure of proprietary information or trade secrets.