The D.C. Circuit Court of Appeals has held that an employer's confidentiality rule violates federal labor law because it could be construed to prohibit employees from discussing the terms and conditions of their employment, even though it does not expressly prohibit employees from doing so. See Cintas Corp. v. NLRB (March 16, 2007).
In Cintas, the employee handbook contained a provision stating:
We honor confidentiality. We recognize and protect the confidentiality of any information concerning the company, its business plans, its partners [which is how the company referred to its employees], new business efforts, customers, accounting and financial matters.
The handbook also provided that "examples of behavior that could result in disciplinary action are: . . . violating a confidence or unauthorized release of confidential information."
The National Labor Relations Act (NLRA) prohibits employers from, among other things, interfering with employees' right to discuss the terms and conditions of their employment with others (commonly known as section 7 rights). As part of its efforts to organize Cintas' approximately 27,000 employees, UNITE HERE filed an unfair labor practice charge with the National Labor Relations Board (NLRB), claiming the company's confidentiality policy violated the NLRA. The NLRB General Counsel pursued the case and an administrative law judge and the NLRB board both ruled against Cintas.
The D.C. Court of Appeals upheld the NLRB's determination, even though the policy does not explicitly prohibit employees from discussing the terms and conditions of their employment and even though the company has never used it to prohibit section 7 activity. The court held that a rule that does not explicitly prohibit section 7 activity may still violate the NLRA if employees "would reasonably construe the language to prohibit" such activity.
The court found the rule to be unlawful even though the company never used it to prohibit section 7 activity because "'mere maintenance' of a rule likely to chill section 7 activity" can amount to an unfair labor practice "even absent evidence of enforcement". Thus, according to the court, if the NLRB determines that employees would reasonably construe a rule to restrict discussion of the terms and conditions of their employment, the NLRB is under no obligation to consider whether the employer has ever enforced the rule in violation of employees' section 7 rights.
The court also rejected the company's argument that the NLRB's interpretation of the rule was too broad. The court held that the NLRB's interpretation of the rule was "reasonably defensible" because the company did not distinguish section 7 protected conduct from conduct that would violate company policy. The court distinguished the rule in this case from non-disclosure rules that have been upheld, because such rules were specifically limited by the context or language "so as to be clear to employees that the rules did not restrict employees' section 7 rights." The court held that a more narrowly tailored rule "that does not interfere with protected employee activity would be sufficient to accomplish the Company's presumed interest in protecting confidential information."
Accordingly, the court ordered Cintas to comply with the NLRB's order to either rescind the disputed language and provide employees with handbook inserts substituting lawful language, or distribute a revised employee handbook with the appropriate substitution of lawful language for unlawful language.
Employers' Bottom Line:
This decision is important to employers because it upholds the Board's broad interpretation of what type of policy language may violate employees' section 7 rights. As demonstrated by this case, even policies that are not intended to restrict employees' section 7 rights may be found to be unlawful. Additionally, as union organizing efforts continue to increase across the country, it is likely that unions will attempt to use such policies to ignite employee unrest by claiming employers are trying to keep employees from discussing their working conditions. In fact UNITE HERE has already issued statements regarding the court's decision in this case, claiming it "allows workers to talk to each other about their working conditions as a first step toward trying to improve those conditions."
This decision does not prohibit employers from adopting confidentiality policies; however, any such policy should be narrowly tailored and clearly state that it is not intended to preclude employees from discussing the terms and conditions of their employment. Ford & Harrison attorneys and F&H Solutions Group consultants are available to assist you in reviewing any policies about which you have concerns in light of this decision.