Employer confidentiality policies underscore the tension between an employer’s need to protect confidential information and an employee’s right to discuss terms and conditions of employment. The issue has received increased attention recently with the exponential growth of social media, instant communication and theft of confidential information. Employers are erecting stronger firewalls and more restrictive employment policies to protect their information and that of their clients and customers. These are worthy goals from a business perspective, but they potentially conflict with the legal right of employees to discuss information relating to their wages, hours and working conditions. Although the law in this area is developing, there seem to be some ‘rules of the road’ shaping up and this article will discuss these parameters. The topic also has applicability to employers outside the US who may be facing similar issues, but perhaps with even more protective laws.

In the US, the National Labor Relations Board (NLRB), which administers enforcement of the National Labor Relations Act (NLRA), has set forth the standard governing the legality of employer confidentiality policies. The NLRB has held an employer violates the law by maintaining a rule that “reasonably tends to chill employees in the exercise of their Section 7 rights” under the NLRA to discuss terms and conditions of employment. In this regard, the NLRB uses a two-part test. First, it must determine whether the rule at issue explicitly restricts employees’ rights; if it does, the rule is unlawful and the analysis ends. Second, if the rule survives the first part of the test, the NLRB goes on to determine whether employees would reasonably construe the rule to restrict employee rights, whether the rule was promulgated in response to union activity, or if the rule was applied to restrict employee rights. The employer rule is unlawful if any of these factors are satisfied.

Jan-Mar 2015 Issue

Skadden, Arps, Slate, Meagher & Flom LLP