Federal Court Upholds NLRB Finding on Employer Confidentiality Policy

Policy unlawfully prohibited employee discussion about their wages

The Fifth Circuit Federal Appeals Court on March 28, 2014, upheld a National Labor Relations Board decision that a confidentiality policy stymied employee discussions of wages in violation of Section 8(a)(1) of the National Labor Relations Act (NLRA).
Under this section of the NLRA, it is an unfair labor practice for an employer to interfere with, restrain, or coerce employees in the exercise of the right to self-organization; forming, joining, and assisting labor organizations; collective bargaining; and engaging “in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”
Flex Frac Logistics, LLC, the employer, is a Fort Worth, Texas-based non-unionized trucking company, that required employees to sign a confidentiality policy that prohibited employees from sharing or copying “confidential information” that included “personnel information and documents” without prior management approval. The policy further stated that disclosure of this information “could lead to termination, as well as other possible legal action.”
The NLRB found that the confidentiality policy was facially unlawful because employees would reasonably interpret the ban on disclosing “personnel information and documents” to prohibit discussing their salaries and wages with coworkers or non-employees.
On appeal to the Fifth Circuit, the Court enforced the Board’s order. The Court began by quoting its decision in NLRB v. Brookshire Grocery Co., 919 F.3d 359, 363 (1990): “A ‘workplace rule that forb[ids] the discussion of confidential wage information between employees … patently violate[s] section 8(a)(1).'”
Agreeing with the NLRB that employees would reasonably construe the confidentiality policy to prohibit discussion of wages, the Court observed that “[t]he confidentiality clause’s express terms prevent discussion of personnel information outside the company, and [the employer] presents no evidence that” employees ignored the clause’s explicit prohibition and discussed wages with non-employees. The Court rejected the Employer’s claim that employees did not actually interpret the clause to prohibit wage discussions, noting that “the actual practice of employees is not determinative” to determining whether a policy facially violates the Act.
The Court’s published decision is available here.