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Employment Blog

Broad Confidentiality Rule - Violation of Employee Rights?

Authored by Dean R. Dietrich
Posted on August 11, 2014
Filed under Employment

A recent decision from the National Labor Relations Board has again highlighted the lengths to which the NLRB will go to seek out protection of employee rights under Section 7 of the National Labor Relations Act. This Section allows employees to communicate regarding union organizing activities and exchange information amongst employees regarding possible union organizing efforts without retaliation by the Employer.

In a recent decision, the Board, by a 2-1 margin, found that the confidentiality rule in the Company Code of Business Conduct violated the employee rights to discuss things like wages and terms and conditions of employment. The confidentiality portion of the Code of Business Conduct was directed at employees and indicated that customer and employee information should be kept secure and that such information could only be used "fairly, lawfully and only for the purpose for which it was obtained." The majority of the Board felt that this language was unlawful because employees could "reasonably construe the admonition to keep employee information secure to prohibit discussion and disclosure of information about other employees, such as wages and terms and conditions of employment."

It was argued that the Code of Business Conduct was designed to inform employees of the business ethics of the Company and not as an employee handbook with work rules affecting employee conduct. This argument fell on deaf ears even though the administrative law judge had used that rationale to find no violation of the employee rights protected by Section 7.

This decision shows that the Board is taking every step to ensure employee rights. Some would suggest that it is reaching well beyond the rationale used in the past by the Board to find a violation of Section 7 rights. Employers must recognize the risks that exist under these very liberal interpretations of Section 7 rights afforded employees. A review of the Company handbook may be appropriate to ensure there is no provision that could fall under this scrutiny.