4.02.2014

Fifth Circuit Rules That Employer’s Overly Broad Confidentiality Policy Unlawfully Restricts Employees’ Right to Discuss Wages


In Flex Frac Logistics, LLC v. NLRB (March 24, 2014), the Fifth Circuit Court of Appeals upheld a National Labor Relations Board (“NLRB”) ruling that struck down an overly broad employer confidentiality policy. The court held that this overly broad policy could be interpreted as prohibiting an employee from discussing his wages with others – a right specifically protected by the National Labor Relations Act (“NLRA”).

At issue in that case was an employer confidentiality policy that prohibited employees from disclosing information that included “financial information.” In its original decision, the NLRB noted that this “financial information … necessarily includes wages and thereby reinforces the likely inference that the rule proscribes wage discussion with outsiders.” The Fifth Circuit agreed with this reasoning, further noting that the policy failed to exclude wages in this definition. The Fifth Circuit explained that without this specific exclusion, it is even more likely that an employee could interpret this policy as restricting his ability to discuss his wages with others.

In this ruling, the Fifth Circuit noted that although the policy at issue did not expressly prohibit employees from discussing their wages with others, a workplace rule can still violate the NLRA if an employee could reasonably construe that rule to prohibit employees from engaging in activities protected under the NLRA (here, the employees’ ability to discuss their wages with others).

The take away from this case is that overly broad employer policies will face increased scrutiny under the NLRA. This is especially true with policies that an employee could reasonably interpret as restricting his ability to discuss his wages with others. Employers should be mindful of this and other NLRA rulings when crafting their employment policies.




Contact: Shawn Romer
330.762.7992
sromer@ralaw.com 

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