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Handbook Confidentiality Policies May Need to Be Amended

    Client Alerts
  • April 27, 2007

Last month, the U.S. Court of Appeals for the D.C. Circuit issued a decision finding that an employer’s general confidentiality policy contained in its employee handbook violated Section 7 of the National Labor Relations Act.  The case resulted from an NLRB complaint against Cintas Corporation’s handbook, which required employees to keep confidential any information concerning the company and its business.  A union seeking to organize Cintas’ employees claimed that the handbook provision violated employees’ rights to internally discuss wages and other terms and conditions of employment.  The company claimed that the policy did not expressly prohibit such discussions, and that no employee had ever been disciplined for engaging in such conversations.


Both the NLRB and the D.C. Circuit on appeal concluded that the handbook policy violated Section 7 of the NLRA.  The court concluded that despite the lack of any express prohibition on discussion of employment terms, an employee reading the policy could reasonably construe the policy to prohibit such discussions.  The lack of any disciplinary actions did not remove the deterrent effect that could result from the policy.  The court required Cintas to amend the handbook policy.


In its decision, the D.C. Circuit stated that employers could comply with Section 7’s requirements by drafting confidentiality policies that expressly preserve Section 7 rights.  Employers should not panic based on this decision, and rush to immediately amend employee handbooks and employment contracts containing confidentiality policies or covenants.  In its decision, the D.C. Circuit gave the NLRB decision a level of deference that may not be matched by other federal courts asked to consider this issue.  Moreover, in the absence of an active unionization campaign, the handbook provisions are unlikely to be challenged.  Employers who are in the process of routine updates to handbooks and employment contracts may want to amend confidentiality provisions to comply with this new decision.