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NLRB Strikes Down Another Employer Confidentiality Policy

In a recent decision, the National Labor Relations Board (NLRB) struck down another confidentiality policy maintained by an employer. The employer, MCPc, Inc., a technology services company, had a confidentiality policy in its handbook which provided that “dissemination of confidential information, such as personal or financial information, etc., will subject the responsible employee to disciplinary action or possible termination.”

During a “team building” meeting, an engineer of the Company advised his manager and coworkers that he had concerns about the heavy workload and suggested that the Company hire more engineers. The engineer went on to criticize the Company’s decision to hire a corporate executive with an annual salary of $400,000 because the money could have been used to hire additional engineers. Coworkers at the meeting agreed with his comments. Approximately one week later, the engineer was called into a meeting with the Company’s CEO and accused of improperly accessing computer files to discover the salary information. The engineer had special computer access rights to the database due to a project that he was working on. The Company found that he violated the confidentiality policy and terminated his employment.

The NLRB concluded that the confidentiality policy was overbroad. Employees could reasonably construe the policy to prohibit a discussion of wages and other terms and conditions of employment. In recent decisions, the NLRB has set aside overbroad confidentiality policies because they violate Section 7 rights under the National Labor Relations Act (NLRA). Section 7 protects an employee’s right to engage in concerted activities including the right to address matters relating to wages, benefits, hours and working conditions.

According to the NLRB, the engineer engaged in a protected activity when he discussed the heavy workloads and staff shortages during the “team building” meeting. The court rejected the Company’s argument that the employee was disciplined for inappropriately accessing confidential information. The NLRB ordered the Company to cease and desist from utilizing the confidentiality policy and fully reinstate the engineer with back pay and benefits.

It is common for employers to overlook an individual’s Section 7 rights under the NLRA. Having an overbroad policy on confidentiality can stifle an employee’s right to voice concerns in the workplace. The NLRB’s opinion should not be construed to authorize an employee to access and use confidential information whenever it is needed to support a grievance. Disciplinary action is proper if an employee acquires confidential information without authorization and in violation of policy. Employers need to review their confidentiality policies and make sure the restrictions are not overreaching. They also need to protect confidential information from non-management employees who may use the information to challenge wages, hours or working conditions.