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National Labor Relations Board Blesses Employer Confidential Information Policy

    Client Alerts
  • January 13, 2020

The National Labor Relations Board’s landmark Boeing Co. decision set a new legal standard for determining whether employer policies interfere with employee rights to engage in protected concerted activity under federal labor law. This case explains that such policies will be deemed legal if they appear to have little impact on employee legal rights and were issued for legitimate business purposes. Last month, the NLRB used Boeing Co. to uphold an employer policy requiring employees to maintain the confidentiality of certain business information.                                           

In National Indemnity Co., the employer issued a broad confidential information policy. In 2016, it amended the policy, deleting references to personnel information as part of the prohibition and explicitly stating that the policy does not apply to employees discussing their compensation. With this change in place, the board concluded that the revised policy meets the Boeing Co. test. It could not reasonably be interpreted to discourage employees from discussing terms and conditions of employment. The employer also articulated legitimate business reasons for protecting sensitive information from disclosure outside of the company.

The NLRB classified this as a Category 1 rule, meaning that it is deemed lawful without the need for individual scrutiny. In order for confidential information policies to meet this test, they must explicitly carve out salary and personnel information from their coverage, or make clear that prohibitions against discussion of such matters only apply to information that is accessible exclusively through the employer’s confidential records.