Many, if not most employers maintain policies regarding disclosure by employees of confidential business information. Sometimes these policies appear in employee handbooks, and sometimes employees are required to sign confidential information agreements. A recent National Labor Relations Board decision illustrates the agency’s current view on when such policies do and do not violate employee concerted activity rights.

In Caesars Entertainment, a union challenged a number of policies maintained by the Las Vegas casino, claiming that they violate employees’ Section 7 rights to engage in concerted activity. Among the policies challenged was Caesars’ confidential information disclosure policy included in the employee handbook. The policy first prohibited employees from “disclosing to anyone outside the Company, whether directly or indirectly, any information about the Company which has not been shared with the general public.” The Board concluded that this policy violated Section 7, describing it as “extraordinarily broad in scope.” The NLRB said that this would include information regarding terms and conditions of employment such as salaries, disciplinary information, terminations, etc. Examples of other types of legitimately protected information used in the policy did not save it from being declared overbroad.

Second, the policy prohibited employees from disclosing confidential information to any “unauthorized persons.” The NLRB found this part of the policy acceptable, because it would not lead employees to conclude that they cannot engage in protected concerted activity. The NLRB stated that once the broader language is deleted from the policy, this limited protection complies with reasonable expectations over protection of disclosure of proprietary information for illegitimate purposes.

These holdings would equally apply to contractual confidential information agreements signed with non-managerial employees. Employers using either confidential information policies or agreements should review their language to make certain that the types of prohibited conduct are clearly articulated, and that they cannot be interpreted to extend to protected employee concerted activity.