How Much Do You Make An Hour Anyway?

One of the most common frustrations faced by companies and management is the age old issue of employees discussing salary information by telling making comparisons of their hourly rates. It is usually something like a new hire stating: "I was really happy to start at $13.00 an hour!" to someone who may only be making $11.97 for the same position.

This usually results in discussions about relative levels of work experience, timing of performance appraisals and wage adjustments, tight labor markets, and all manner of other reasons why this is totally unacceptable. It will normally end with a supervisor suggesting that one or both employees be disciplined for disclosing "confidential information".

This can be a big mistake.

The National Labor Relations Board just issued another opinion over this issue. This is not the first opinion to have the same finding. In Northeastern Land Services, Ltd. d/b/a The NLS Group, 352 NLRB No. 89 (June 27, 2008, the Board ruled that an employee fired for violating a company policy is due entitled to reinstatement and several years back pay as well!

NLS is a staffing company. Most such agencies prefer that their employees not address pay and benefit issues to the client company. This is so for many reasons, including the idea that clients don't want to deal with agency pay issues, nor would they want agency workers to be sharing salary information with the client's regular employees.

The NLS Group tried to deal with this by including the following clause in its Temporary Employment Agreement:

Employee understands that Employee will have direct access to and contact with NLS' various clients as Employee performs services hereunder and Employee agrees to keep all information obtained or utilized in the course of performing its services strictly confidential. Employee agrees not to solicit work or accept assignments from any of NLS's clients directly while engaged in services hereunder, or for a period of six (6) months after the termination of this agreement. Employee also understands that the terms of this employment, including compensation, are confidential to Employee and the NLS Group. Disclosure of these terms to other parties may constitute grounds for dismissal.

While it may seem like common sense and quite logical, it is illegal. It doesn't matter whether the employer is unionized or not. Confidentiality concerns under the National Labor Relations Act (NLRA) can arise in any workplace.

Here, the NLRB decided that NLS employees would reasonably understand the above clause to prohibit them from discussing the terms and conditions of their employment with a union organizer – conversations that are protected by the NLRA. Because the rule was overbroad, the termination pursuant to the rule was also unlawful, even though there was no evidence that the terminated employee actually tried to discuss his wages with a union or his coworkers.

There are numerous other recent cases with similar findings:

• Martin Luther Memorial Home d/b/a Lutheran Heritage Village-Livonia, 343 NLRB No. 75 (2004), dealing with protected activity
• Claremont Resort and Spa, 344 NLRB No. 105 (2005), dealing with handbooks
• Longs Drug Stores California, Inc., 347 NLRB No. 45 (2006), prohibiting negative conversations about the employer
• Guardsmark LLC v. NLRB, 475 F.3d 369 (D.C. Cir. 2007), limiting employee fraternization off-duty
• Cintas Corporation v. NLRB , 482 F.3d 463 (D.C. Cir. 2007, confidentiality rule that could be construed to make protected concerted activity illegal

Employers need to have rules and protect confidential information for many legal and permissible reasons. Handbooks and other policies are often designed with this concern in mind.

The risk is that quite often such material is written or drafted by people who have no understanding of the National Labor Relations Act and it's potential impact on such materials. Your company may be suffering legal exposure for non-union employers under the NLRA. In fact, with respect to communications among coworkers, a confidentiality provision must be quite limited to avoid a likely NLRA violation.

Unhappy employees or a labor union are aware of how this exposure can be used to put pressure on employers. In most situation, an affected employer had no intention of restricting employee rights protected under the National Labor Relations Act. However, good intentions are not a defense against an aggressive union or former employee.

It is a good idea to have your handbooks and policies reviewed periodically. You may be well advised to seek a legal review if you promulgating a new policy manual or handbook. While it may have a high upfront cost, you may save the costs of litigation, and a highly costly loss in court like that seen in the case above.

If you need help finding resources for such projects, I am available to assist you in developing an affordable resource for doing so. Please feel free to contact me at michael.vandervort@gmail.com or +1 813 417 8781.