NLRA Limits on Confidentiality Policies Reveal New Concerns for Employers

In recent months, a surprising trend has emerged in which the courts have used an expanded interpretation of employee rights under Section 7 of the National Labor Relations Act ("NLRA") to invalidate a diverse collection of employment practices, including anti-fraternization, wage discussion and no-access policies. Perhaps even more alarming is that these policies have been struck down where there is no evidence that the policies had been used to restrict Section 7 rights. Most recently, in Cintas Corp. v. NLRB, D.C. Cir. No. 05-1305, 3/16/07, the Court of Appeals for the District of Columbia affirmed a National Labor Relations Board ("NLRB") decision striking down a seemingly innocuous confidentiality policy as violating its employees' Section 7 rights, even where Cintas never enforced the policy in such a manner and the employees did not interpret the policy as restricting their Section 7 rights. Union and non-union employers alike must now stand up and take notice of this emerging trend when drafting and maintaining employment policies, or else open themselves up to increased union sympathy within their workforce and run a greater risk of facing an unfair labor practice charge.

Section 7 of the NLRA guarantees employees the right to form, join or assist labor organizations and to engage in other concerted activities for their mutual aid and protection. These rights are enforced through Section 8(a)(1) of the NLRA, which makes it an unfair labor practice for an employer to interfere with an employee's exercise of his or her Section 7 rights. The courts have previously interpreted these provisions to protect an employee's right to discuss the terms and conditions of his or her employment with other employees and non-employees.

Unfortunately, Cintas learned the hard way how far-reaching the protections of Section 7 can be, even in a non-union environment. Cintas enacted a policy addressing how employees are expected to treat confidential information: "We honor confidentiality. We recognize and protect the confidentiality of any information concerning the company, its business plans, its partners [the term Cintas uses to refer to its employees], new business efforts, customers, accounting and financial matters." During a recent organizing campaign, the union filed unfair labor practice charges against Cintas alleging, among other things, that Cintas maintained the subject confidentiality policy in violation of Section 8(a)(1).  

Cintas argued before the NLRB and the court that (1) the language did not explicitly prohibit conduct protected by Section 7, (2) the employees have not interpreted the confidentiality policy to prohibit conduct protected by Section 7, and (3) Cintas never interpreted the policy to prohibit or applied the policy to conduct protected by Section 7.

The NLRB and the court rejected all three of Cintas' arguments, finding that the actual interpretation or enforcement of the policy was not dispositive. Rather, the crux of the inquiry was whether the "employees would reasonably construe the [disputed] language to prohibit Section 7 activity." Relying heavily on a recent decision striking down an anti-fraternization policy as restricting Section 7 rights, the court determined that the language "any information concerning … partners," in the Cintas policy was so broad that it could only be interpreted to prohibit employees from discussing the terms and conditions of their employment. Unlike other policies sufficiently limited by context or language, the court found that the Cintas policy the policy "would reasonably chill employees in the exercise of their Section 7 rights."

The lesson to be learned is that Section 7 has broad reaching implications on the employment policies of all employers, whether unionized or not, regardless of whether the policy is intended to be restrictive of Section 7 conduct or is actually applied in such a manner. The Cintas court nevertheless recognized that an employer could enact a policy to protect its confidential information without violating the Section 7 rights of its employees. The key is to draft a policy that strikes the right balance of protecting the company's legitimate interests without imposing restrictions or limitations that affect its employees' rights to communicate about their wages, hours and other terms and conditions of employment to the extent protected under the NLRA. We recommend that employers proactively consult labor counsel and collaboratively review existing policies to determine if your organization is at risk to an unfair labor practice charge of unlawfully infringing upon your employees' Section 7 rights. At Buchanan Ingersoll & Rooney, our labor lawyers have the necessary experience to help employers navigate NLRA landmines. Our goal is to help you maximize your organization's opportunity to defend itself against unfair labor practice charges and lawfully maintain a union-free environment.