NLRB Judge Rules That Clauses That Are Too Broad Are Illegal
As we have seen in the recent months, the NLRB has been very focused on the rights of employees – union and non-union – to talk about their wages, hours and working conditions whether face-to-face or on Facebook. A decision by an NLRB administrative law judge makes the point that even provisions in the employment contracts of mortgage bankers can get an employer into trouble if an employee could “reasonably believe” that the language of the contract prohibits the exercise of rights protected under the NLRA.
The “Illegal” Provisions Are Not That Unusual
Here is what the Mortgage Banker Employment contract provided:
Proprietary/Confidential Information. You agree that: (a) You shall hold and maintain all Proprietary/ Confidential Information in the strictest of confidence and that you shall preserve and protect the confidentiality, privacy and secrecy of all Proprietary/Confidential Information; (b) You shall not disclose, reveal or expose any Proprietary/Confidential Information to any person, business or entity . . . (e) You shall take all necessary precautions to keep Proprietary/Confidential Information secret, private, concealed and protected from disclosure, and shall follow and implement the Company’s privacy and security procedures . . .
For purposes of this Agreement, “Proprietary/Confidential Information” means: (a) non-public information relating to or regarding the Company’s business, personnel, customers, operations, or affairs; (b) non-public information which the Company labeled or treated as confidential, proprietary, secret or sensitive business information . . .“Proprietary/Confidential Information” includes, but is not limited to, the following categories of information, irrespective of the medium in which it is stored . . . Personnel Information including, but not limited to, 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; Personal Information Pertaining to Company Executives and Officers including, but not limited to, personal and family information, personal financial information, investment and investment opportunities, background information, personal activities, information pertaining to the work and non-work schedules, contacts, meetings, meeting attendees, travel, home phone numbers, cell phone numbers, addresses, and email addresses;
Non-disparagement. You agree that you will not (nor will you cause or cooperate with others to) 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 (including, but not limited to, any statements made via websites, blogs, postings to the internet, or emails and whether or not they are made anonymously or through the use of a pseudonym). … The foregoing does not apply to statutorily privileged statements made to governmental or law enforcement agencies.
This case came up when a mortgage banker for Quicken Loans who had signed the agreement was sent a letter by the company after resigning employment warning her to abide by the confidentiality and non-disparagement provisions of her employment contract. She filed a charge with the NLRB, and the NLRB’s Administrative Law Judge held that there “can be no doubt” that an employee reading these restrictions could “reasonably construe” them to prohibit activity protected by the NLRA. The judge ordered the company to rescind the language of the contract and inform all employees that the language is void, of no effect and will not be enforced.
What This Means for Employers
While this is not yet an official holding by the NLRB, it likely will be adopted by the Board, which now consists of just three members – all appointed by the current administration. Employers should take a look at their employment policies and contract provisions to make sure they aren’t too broad in preventing employee discussion of wages, hours and working conditions – including the wages, hours and working conditions of their co-workers. What is troubling to employers and to employees is that “personnel information” seems to include employee “personal information” such as home phone numbers, cell phone numbers, addresses and email addresses. There is no telling just how far this will go. But for now it would be a good idea to at least consider adding to any policy or contract provision disclaimer language that would make it clear that employees would not be prohibited from exercising protected rights under the NLRA. Hopefully by doing that it would be far less likely for a judge to say that an employee reading those restrictions could “reasonably construe” them to prohibit activity protected by the NLRA.
Reference: Quicken Loans, Inc., JD(NY)-03-13, January 8, 2013.
If you have any questions about this topic, please contact Steve Lyman at slyman@hallrender.com or your regular Hall Render attorney.
