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NLRB Upholds Termination for Disclosure of Confidential Information, While Overturning Firing Based on Telling Co-Worker About Potential Job Loss

    Client Alerts
  • June 13, 2014

Two May 30 decisions from the National Labor Relations Board demonstrate the continuing struggle between the NLRB and employers’ attempts to restrict employee discussion of sensitive business information. In one case, the NLRB concluded that the employer was justified in terminating an employee for divulging confidential customer information. In the other, the Board rejected the employer’s authority to discipline an employee for advising a co-worker about her lack of job security.
In Flex Frac Logistics, LLC, the NLRB’s counsel contended that the employer maintained an overly broad confidential information policy that inhibited protected concerted activity. The employer terminated an accounting employee for telling outside drivers that the company was “screwing” them because it was charging customers much more for the delivery service than it was paying the drivers. While concluding that the employer’s confidential information policy was over-broad, the Board upheld termination of the accounting employee. The NLRB stated that the employer had a legitimate business interest in keeping its customer rates private, and that the discharged employee was aware of this policy.

In Food Services of America, Inc., the employer terminated an employee for repeatedly informing a co-worker that she was about to be fired for performance issues. This co-worker shared copies of these messages with her supervisor, and as a result, the company terminated the plaintiff for harassing and lying to her co-worker. The NLRB concluded that the plaintiff’s communications with her co-worker were protected concerted activity. Telling another employee her job is in jeopardy is protected regardless of possible ulterior motives the plaintiff may have had in communicating this information. Absent evidence of malicious lying, the fact that the plaintiff’s assumptions were incorrect does not change this analysis.
These decisions demonstrate the increasingly difficult task employers face in determining whether apparently disloyal and malicious communications by employees are protected concerted activity. When the communications involve confidential business information, the employer stands a stronger change of legally justifying its position. However, when the communications involve office gossip or conflicts between employees and supervisors, the NLRB is more likely to conclude that this involves protected discussion of terms and conditions of employment.