Flex Frac Logistics required its employees to sign a confidentiality agreement precluding workers from sharing confidential information, such as personnel information, with anyone outside of the business.
Acting on an unfair labor practice case filed by a terminated employee, the National Labor Relations Board held that the confidentiality agreement interfered with the right of employees under Section 7 of the National Labor Relations Act to engage in concerted activity for their mutual aid or protection, and, specifically, the right to discuss wages, hours and working conditions.
In response to a challenge to the NLRB ruling, the U.S. Court of Appeals for the 5th Circuit agreed with the NLRB, and held that employees would reasonably understand the rule as a ban on discussing employee wages with anyone outside the company. The court relied on past precedent holding that workplace rules forbidding employee discussion of confidential wage information violate the NLRA. Even rules that do not expressly interfere with such rights still interfere with employee rights if workers would reasonably construe them to prohibit or limit their exercise of rights. Flex Frac Logistics LLC v. NLRB, 5th Circuit, No. 12-60752 (March 24, 2014).
IMPACT: Employers cannot maintain employee confidentiality rules that prohibit the discussion of personnel information involving wages and other working conditions.