Policy Deeming All Information About Employees to Be Confidential Illegally Interferes With Employees’ Right to Discuss Working Conditions, NLRB Rules
 
December 29, 2005
 
Todd D. Steenson- Chicago

Previous articles in this newsletter have noted that the National Labor Relations Act grants employees the right to discuss workplace matters that affect their common interests – the right to engage in concerted activity. The National Labor Relations Board (NLRB) considers employer policies that restrict employees’ rights to discuss workplace issues to be an illegal interference with employees’ rights of concerted action, as it demonstrated in a recent decision. The Board ruled that a provision in Cintas Corporation’s employee reference guide, which warned employees that disclosing any confidential information could lead to discipline, could reasonably be interpreted as interfering with workers’ rights to discuss workplace issues and engage in concerted activity. Cintas Corp., 344 N.L.R.B. No. 118 (2005).

Background Facts

In August 2002, Cintas distributed a “partner reference guide” (the company calls its employees “partners”) that stressed the importance of maintaining confidentiality. The Guide expressly told employees that “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” (emphasis added). It added that “violating a confidence or [the] unauthorized release of confidential information” could lead to discipline.

The union UNITE HERE, which was trying to organize Cintas’ workers, filed an unfair labor practice charge claiming that the “partner reference guide” limited the right of employees to discuss their terms and conditions of employment in violation of the National Labor Relations Act. Cintas asserted that the guide did no such thing, and further argued that although the company was aware of several flyers distributed by representatives of UNITE HERE that named several employees and disclosed their hourly rates of pay, none of these employees were disciplined for violating the confidentiality rule.

Nonetheless, an Administrative Law Judge (ALJ) ruled that the guide’s confidentiality provision unlawfully limited and “chilled” the right of employees to discuss their working conditions. The ALJ reasoned that even though no one mentioned in the union flyer was disciplined, employees could reasonably interpret the confidentiality rule as restricting their right to discuss their wages and terms of employment. The Judge stated that Cintas was responsible for any ambiguity in the rule, and that it had failed to present a business justification for a broad rule stating that “any information” about the company or its employees was confidential. The ALJ recommended that Cintas be required to rescind the rule, post a notice in each of its facilities acknowledging that it cannot discipline employees for discussing their wages and other terms of employment, and to notify each employee in writing that the unlawful handbook provision had been rescinded.

On review, the NLRB agreed. It held that the “rule’s unqualified prohibition of the release of ‘any information’ regarding ‘its partners’ could be reasonably construed by employees to restrict discussion of wages and other terms and conditions of employment with their fellow employees and with the Union.” However, the Board slightly modified the ALJ’s order. It stated that the company did not have to go to the expense of publishing all new handbooks, but instead could place inserts setting forth the corrected policy in the old handbooks. Any newly printed handbooks must contain the corrected language, the NLRB ruled.

Significance

The Cintas decision proves once again that the National Labor Relations Act applies even if your workers are not unionized, and does so in ways you may not expect. The Board has repeatedly ruled that employees have the right to freely discuss the terms and conditions of their employment (of course, outside of the actual working time of the employees). This includes the right to discuss employee wage rates. The decision shows that a blanket policy of confidentiality regarding all matters concerning employees will be viewed by the Board to limit employees’ rights to discuss their working conditions and will be deemed unlawful. Employers should consider having experienced labor counsel review such confidentiality policies.

For more information, e-mail Todd D. Steenson at todd.steenson@hklaw.com or call toll free, 1-888-688-8500.

Related Practices