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Northeastern Land Services v. NLRB, 130 s. Ct. 3498, 177 L. Ed. 2d, 1085, 2010, U.S. LEXIS 5339 (U.S. 2010) at:

B. Overbreadth of the Confidentiality Provision

Section 8 of the NLRA prohibits employers from "interfer[ing] with, restrain[ing], or coerc[ing] employees in the exercise of the rights guaranteed in" section 7 of the NLRA. 29 U.S.C. § 158(a)(1). Section 7 guarantees employees the right to "self organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their  [*16]  own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection." 29 U.S.C. § 157.
Section 8(a)(1) has been read to bar employer interference with employees' right to discuss the terms and conditions of their employment with others under section 7 of the NLRA. See Beth Israel Hosp. v. NLRB, 437 U.S. 483, 491, 98 S. Ct. 2463, 57 L. Ed. 2d 370 (1978) ("[T]he right of employees to self organize and bargain collectively established by § 7 . . . necessarily encompasses the right effectively to communicate with one another regarding self organization at the jobsite."); Cent. Hardware Co. v. NLRB, 407 U.S. 539, 543, 92 S. Ct. 2238, 33 L. Ed. 2d 122 (1972) ("[O]rganization rights are not viable in a vacuum; their effectiveness depends in some measure on the ability of employees to learn the advantages and disadvantages of organization from others.").
An employer violates section 8(a)(1) when it maintains a work rule that "would reasonably tend to chill employees in the exercise of their Section 7 rights." Lafayette Park Hotel, 326 N.L.R.B. 824, 825 (1998). Under the Board's caselaw, if the rule is "likely to have a chilling effect on Section 7 rights, the Board may conclude that [its] maintenance  [*17]  is an unfair labor practice, even absent evidence of enforcement." Id.; see also Guardsmark, LLC v. NLRB 374 U.S. App. D.C. 360, 475 F.3d 369, 374-80 (D.C. Cir. 2007) (explaining and applying Lafayette Park "mere maintenance" rule).
NLS contends that the confidentiality provision did not violate the NLRA because, as a factual matter, it did not prohibit employees from discussing terms of employment among themselves and, although it was enforced, it was not enforced in the face of union activity. NLS asserts that mere broad wording, without evidence of actual chilling of union activity, is insufficient to violate section 8(a)(1).
NLS then makes a qualitatively different argument: that the Board must engage in a balancing test. Here, NLS contends the Board failed to consider the legitimate justification it had for the confidentiality provision: labor costs were a key component of its bids to clients, and NLS did not want its employees jeopardizing its bids. NLS's arguments, however, are at odds with current Board precedent.
After the ALJ ruling and before the Board rendered its decision here, the Board decided Lutheran Heritage, 343 N.L.R.B. 646 (2004). Lutheran Heritage clarified the nature of the Board's inquiry  [*18]  and confirmed the Board's prior caselaw that "mere maintenance" of a rule that "would reasonably tend to chill employees in the exercise of their Section 7 rights" is unlawful under Board caselaw, Lafayette Park, 326 N.L.R.B. at 825, and that there need not be any evidence of actual chilling of union activity as NLS claims.
In Lutheran Heritage, the Board articulated a two-step framework for determining whether an employer's maintenance of a work rule violates section 8(a)(1). First, if the rule explicitly restricts section 7 activity, it is unlawful. Id. at 646. Second, even if the rule does not explicitly restrict section 7 activity, it is nonetheless unlawful if "(1) employees would reasonably construe the language [of the rule] to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights." Id. at 647.
Here, the Board relied on the first prong of the second part of the test. It found that although the NLS rule did not explicitly restrict section 7 activity, employees would reasonably construe the language of the rule to prohibit section 7 activity under Lutheran Heritage. The  [*19]  plain language of the confidentiality provision provides: "Disclosure of these terms [of employment] to other parties may constitute grounds for dismissal." The Board's finding that this language could be fairly read to extend to disclosure of terms of employment to union representatives is supportable. The precise subject matter of the forbidden disclosure -- terms of employment, including compensation -- went to a prime area of concern under section 7. n3
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NLS asserts that the confidentiality provision is lawful because the plain text of the provision did not forbid employees from talking to each other or to union organizers. This argument fails to address the Board's Lutheran Heritage analysis, which holds that a provision is unlawful if employees would reasonably believe it forbids such communication.
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The Board's interpretation was consistent with its prior caselaw. n4 See Cintas Corp., 344 N.L.R.B. 943, 943 (2005) (finding overbroad a confidentiality provision prohibiting "the release of 'any information' regarding '[the company's] partners' [because it] could be reasonably construed by employees to restrict discussion of wages and other terms and conditions of employment with their  [*20]  fellow employees and with the Union"), enforced, 375 U.S. App. D.C. 371, 482 F.3d 463 (D.C. Cir. 2007).
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NLS alludes to but does not develop an argument that the Board's result is inconsistent with the prior caselaw, as demonstrated by the ALJ's reading of the caselaw. We set aside NLS's waiver and consider the point. We find no such inconsistency.
In interpreting NLS's provision as a "less serious infringement on its employees' Section 7 rights," the ALJ relied on cases involving more narrowly drafted confidentiality provisions than the one at issue here. See, e.g., K Mart, 330 N.L.R.B. 263 (1999) (prohibition on disclosing "company business and documents" did not by its terms include employee wages or working conditions and made no reference to employee information); Lafayette Park Hotel, 326 N.L.R.B. at 826 (rule banning discussion of "hotel private" information that did not on its face cover employee wage discussion). Furthermore, under Lafayette Park and Lutheran Heritage's "mere maintenance" rule, the Board did not need to consider the employer's reasons for the rule. Cf. Desert Palace, Inc., 336 N.L.R.B. 271, 272 (2001), (upholding employer's policy of confidentiality on matters relating to its investigation  [*21]  of an allegation that an employee was dealing drugs). Furthermore, since its 1990 decision in Kinder Care Learning Ctrs., Inc., 299 N.L.R.B. 1171 (1990), the Board has consistently held that when a rule's plain language restricts employees' ability to communicate their conditions of employment to third parties it violates section 8(a)(1). Id. at 1172 (finding ban on "parent communication" unlawful).
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NLS argues that the Board should have considered that the confidentiality provision was justified by legitimate business reasons, citing Republic Aviation Corp. v. NLRB, 324 U.S. 793, 65 S. Ct. 982, 89 L. Ed. 1372 (1945). See id. at 798 (noting that in section 7 analysis "[o]pportunity to organize and proper discipline are both essential elements in a balanced society"); see also Tex. Instruments, Inc. v. NLRB, 637 F.2d 822, 833 (1st Cir. 1981). Nothing in Republic Aviation compelled the Board to apply a balancing test here. While the Board could have chosen to structure its rule differently and engage in a balancing analysis, we owe deference to its decision not to do so. Further, as a practical matter, a more narrowly drafted provision would be sufficient to accomplish NLS's goal in maintaining confidentiality in bidding  [*22]  for contracts. See, e.g., Cintas Corp., 482 F.3d at 470 ("A more narrowly tailored rule that does not interfere with protected employee activity would be sufficient to accomplish the Company's presumed interest in protecting confidential information."). We cannot say the Board's interpretation was unreasonable. Some may think this result unattractive, but the Board's rule is intended to be prophylactic and in any event is subject to deference.