W e have prepared this Alert to advise Section 7 of the NLRA - PDF document

G Employment Law Alert October 2005 Does Your Confidentiality Policy Violate The NLRA? By: Martha L. Lester, Esq. and Stefanie P . Tavaglione, Esq. W e have prepared this Alert to advise Section 7 of the NLRA protects the you of a recent decision by the associational rights of employees, including the National Labor Relations Board right of all employees to act “in concert for mutual (“NLRB” or the “Board”) that could affect all aid and protection.” The relevant portion of employers -- union and non-union, alike. In Section 7 provides that: Cintas Corporation and Union of Needletrades, Employees shall have the right to self- Industrial and T extile Employees, AFL-CIO, CLC organization, to form, join or assist labor ( UNITE ), 344 NLRB No. 118, the NLRB held organizations, to bargain collectively that a confidentiality provision contained in an through representatives of their own employer's handbook unlawfully limited the choosing, and to engage in other concerted employees' right to discuss their terms and activities for the purpose of collective conditions of employment, in violation of the bargaining or other mutual aid or protection National Labor Relations Act (“NLRA” or the …. (emphasis added). “Act”). All employers who fall within the Employees may engage in NLRA-protected coverage of the NLRA and the jurisdiction of the activities that do not consist of “traditional” union NLRB – including non-union employers – should activities or collective bargaining. Section 7 of the consider taking certain precautions in the wake of Act is enforced under Section 8(a)(1), which this decision. provides that it is an unfair labor practice for an The NLRA and How it Applies to Non- employer to “interfere with, restrain, or coerce Union Employers employees in the exercise of the rights guaranteed in If you are like most employers, you may be Section 7.” surprised to learn that the NLRA protects non-union Does the NLRA Apply to All Employers? employees as well as union employees. It is critical that, as an employer, you understand your obligations No. While it is true that the NLRA applies under the Act to avoid the costs of having to defend to both union and non-union employers, it does against, and possibly remedy, a charge of unfair labor not apply to all employers, nor does it provide practices. protection for all employees. Certain employers This document is published by Lowenstein Sandler PC to keep clients and friends informed about current issues. It is intended to provide general information only. L Roseland, New Jersey Telephone 973.597.2500 65 Livingston Avenue www.lowenstein.com 07068-1791 Fax 973.597.2400

G are excluded from NLRA coverage and NLRB jurisdiction over national defense industries exists jurisdiction, including, but not limited to: regardless of revenue thresholds. · federal and state governments, their The NLRB’s Decision agencies, and political subdivisions; If you, as an employer, fall within the coverage · wholly-owned government of the NLRA and the jurisdiction of the NLRB, the corporations; NLRB's decision in the matter of Cintas Corporation · the Federal Reserve Bank; may well impact you. In that case, the issue before the Board was whether the confidentiality policy · employers subject to the Railway Labor contained in Cintas Corporation's employee Act; and handbook violated Section 8(a)(1) of the Act. · employers in the dog-racing and horse- Specifically, the union alleged that the company's racing industries. confidentiality policy restricted employees from Further, the following individuals (in addition discussing with one another or with union to those employed by the above employers) also representatives their terms and conditions of are exempt from the NLRA's coverage and the employment. The challenged policy stated the NLRB's jurisdiction: following: · agricultural laborers; We honor confidentiality. We recognize · domestic servants; and protect the confidentiality of any information concerning the company, its · individuals employed by a parent or business plans, its partners 1 , new business spouse; efforts, customers, accounting and · independent contractors; and financial matters. (emphasis added). · supervisors. The Board explained that, although this In addition, the NLRB has established as part of language did not explicitly restrict Section 7 its jurisdictional standards certain monetary activity, a violation of Section 8(a)(1) would be thresholds. For example, retail enterprises fall found where: within the NLRB's jurisdiction only if they have a (1) employees reasonably would construe gross volume of business of at least $500,000 per the language to prohibit Section 7 year, inclusive of sales and excise taxes. For a non- activity; retail enterprise to fall within NLRB jurisdiction, the enterprise must have purchases or sales of at (2) the policy was promulgated in response least $50,000 per year. The NLRB has adopted to union activity; or several other revenue-based standards for various 1 The Board clarified that Cintas Corporation used the term enterprises, with the primary exception that “partners” to refer to its employees.

G (3) the rule has been applied to restrict the confidentiality provision “reasonably could be exercise of Section 7 rights. construed as a restriction.” To avoid such result, confidentiality policies must be reviewed The Board then determined that the policy's periodically and redrafted, when necessary, to unqualified prohibition of the release of “any ensure that the policies cover legitimately information” regarding “its partners” reasonably protectable company and customer information, could be construed by the employees to restrict and that they do not restrict protected employee discussion of wages and any other terms and activities. conditions of employment with their fellow employees and/or with their union, and therefore, If you have any further questions about the issue the policy was unlawful under the Act. It is discussed in this Alert, or whether your confidentiality significant to note that the Board reached this policies or any of your other policies should be examined decision even though Cintas Corporation had not as a result of this decision, or any other employment enforced its confidentiality policy against several practices or compliance issues, please do not hesitate to employees who were identified and pictured in a call Martha L. Lester, Chair of the Employment Law union newsletter discussing employees' wage rates. Practice Group, or Stefanie P . T avaglione, a member of The Board reasoned that the mere fact that the the Employment Law Practice Group, at (973) 597- overly broad policy existed constituted a violation of 2500. the employees' Section 7 rights. You also may wish to obtain a copy of our newly published book, “ The Practical Guide to Federal and How Does the Decision Affect Employers? New Jersey Employment Law: The Employer's In light of this decision by the NLRB, employers Resource. ” This Guidebook, published in connection should review thoroughly their handbooks, with the New Jersey Business and Industry Association, guidelines, confidentiality policies, and other is the resource for New Jersey employers seeking to policies and agreements to be certain that any comply with federal and New Jersey laws, regulations confidentiality provisions contained therein are not and procedures in the employment-related area. It in violation of the NLRA. Because employees' provides management with information concerning discussions of their terms and conditions of existing laws, emerging trends, most frequently asked employment, including discussion of wages, could questions and practical tips on managing the workforce be determined to be a protected activity under and workplace. Section 7, it follows that any restriction of such activity may be found to be an illegal, unfair labor practice under the NLRA. The Board has made it clear that such restriction contained within a confidentiality policy may be unlawful even if it is not explicit, as long as the language in the