What Happened To Confidentiality?  What Happened To Confidentiality?

What Happened To Confidentiality?

The National Labor Relations Board (NLRB) has been one of the most active governmental agencies addressing employment issues under the Obama administration. The NLRB has increasingly become involved with employers' non-union workplace concerns, particularly those involving social media. However, there has been comparatively less discussion about the Board’s propensity to invalidate employers’ confidentiality restrictions. Perhaps more than any other issue within the Board’s purview, the dissemination of confidential information can seriously impact a company’s bottom line, and its ability to comply with its legal responsibilities under laws related to the National Labor Relations Board.

A Decision previously handed down by the NLRB against MCPc Inc. illustrates the Board’s increasing activism in the realm of confidentiality restrictions.  There, MCPc fired an employee for discussing an executive’s salary during a team-building meeting in violation of the company’s confidentiality policy.  Nevertheless, the Board unanimously concluded that the company violated the National Labor Relations Act by prohibiting the dissemination of “personal or financial information,” as it could chill employees from discussing wages, benefits, or conditions of employment.  Further, the Board concluded that the employee had a protected right to discuss the executive’s compensation in the context of complaining about employee workloads and pay. 

No employer wants to live in a world where employees are free to run amok discussing financial and other confidential information which may relate to vendors or customers.  Likewise, there is very little practical reason for allowing employees to disseminate trade secrets, medical records, and other private information when doing so could be detrimental to the company, its vendors, customers and clients.

However, the decision in MCPc Inc. should give employers pause before adopting or enforcing broad confidentially restrictions. The legal sphere in which confidentiality restrictions exist has never been so complicated.  Nevertheless, the following steps should help you avoid a conflict with the NLRB:

Audit existing confidentiality agreements and policies and identify potential pitfalls. It is best to retain legal counsel with familiarity of the ever-changing law in this area to assist with the audit.  For example, employee communications to each other in a health care setting may violate HIPAA.  The specific identification of information protected by HIPAA lends credence to the defense of a confidentiality agreement. 

When drafting confidentiality restrictions, describe confidential information with specificity, and be prepared to identify a legitimate business justification for any information the company wishes to be kept confidential;

Consider the necessity of prohibiting employees from discussing anything involving wages, benefits, and other information obtained while employed by the Company.  It might be advisable to narrow the restriction to more specific categories for which it is imperative to maintain confidentiality;

Balance the need to maintain confidentiality over certain information verses the employee’s legal right (protected concerted activity) to share and disseminate certain information to other employees. 

As the NLRB begins the process of considering the reissuance of Decisions impacting the employers’ right to maintain confidentiality of company information as a result of the Supreme Court decision in NLRB v. Noel-Canning which invalidated the recess appointments to the NLRB, employers should consider reviewing their Confidentiality Agreements.     

For more information on confidentiality agreements and workplace best-practices please contact Bob Weisman at (614) 462-2239 or robert.weisman@icemiller.com, or any member of Ice Miller’s Labor and Employment Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances. 
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