News & Events

The NLRB Invalidates Employer’s Confidentiality Rule Prohibiting the Disclosure of Personal Employee Information

By: Hilary L. Moreira

Submitted by Firm:
Bond, Schoeneck & King, PLLC
Firm Contacts:
Louis P. DiLorenzo, Thomas G. Eron
Article Type:
Legal Update

Recently, in Quicken Loans, Inc., the National Labor Relations Board (“NLRB”) continued its close scrutiny of employers’ confidentiality rules by affirming an administrative law judge’s decision invalidating a rule prohibiting non-union employees from disclosing personal information about themselves or their co-workers, such as home phone numbers, cell phone numbers, addresses, and email addresses.

Quicken’s “Proprietary/Confidential Information” rule that was included in certain employment agreements prohibited employees from disclosing non-public information relating to the company’s personnel, including “all personnel lists, rosters, personal information of co-workers, managers, executives and officers; handbooks, personnel files, personnel information such as home phone numbers, cell phone numbers, addresses, and email addresses” to any person, business, or entity.

In affirming the administrative law judge’s decision, the NLRB held that “there can be no doubt that these restrictions would substantially hinder employees in the exercise of their Section 7 rights.” Quicken defended the rule as necessary to protect the time and expense invested in its employees, and to protect the confidential and proprietary information entrusted to the company. The NLRB rejected this defense, and agreed with the administrative law judge that complying with Quicken’s rule would prohibit employees from discussing with union representatives or their co-workers their own wages and benefits, or the names, wages, benefits, addresses, or telephone numbers of other employees. The NLRB concluded that “this would substantially curtail their Section 7 protected concerted activities.”

The NLRB also affirmed the administrative law judge’s invalidation of Quicken’s Non-Disparagement provision in its entirety. The provision stated that employees would not “publicly criticize, ridicule, disparage or defame the Company or its products, services, policies, directors, officers, shareholders, or employees, with or through any written or oral statement or image . . . .” The NLRB concluded that an employee would reasonably construe this provision as restricting his or her rights to engage in protected concerted activities.

In the wake of this decision, and considering the fact that the NLRB is now comprised of a Senate-approved Democratic majority led by Chairman Mark Gaston Pearce, employers should expect continued close scrutiny of confidentiality policies. Employers should carefully review their confidentiality rules to ensure that they do not prohibit employees from discussing wages, benefits, or other terms and conditions of employment either with their co-workers or with union representatives. Employers should also consider including specific examples of prohibited disclosures and a clause specifically providing that the rule is not intended to prohibit an employee’s exercise of rights protected by Section 7 of the National Labor Relations Act.