April 17, 2007 / Issue No. 2-07
 
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  Court Strikes Down Employee Confidentiality Policy as Unlawful Interference with NLRA Rights

A confidentiality policy prohibiting employees from releasing “any information concerning” employees unlawfully interferes with the exercise of employee rights under the National Labor Relations Act (NLRA), the U.S. Court of Appeals for the District of Columbia Circuit has held.

Cintas Corporation distributed an employee handbook containing the following statement in a section titled “Cintas Culture:”

We honor confidentiality.  We recognize and protect the confidentiality of any information concerning the company, its business plans, its partners, new business efforts, customers, accounting and financial matters.

Cintas refers to all of its employees as “partners.”  The “Discipline Policy” section of the handbook warns “partners” that they may be sanctioned for “violating a confidence or [for the] unauthorized release of confidential information.”

The union UNITE HERE filed unfair labor practice charges against the company with the National Labor Relations Board, claiming that the policy violates the NLRA’s proscription against employer interference with employees’ right to discuss terms and conditions of employment.  The Board agreed with the union, and the court affirmed its judgment. 

Cintas made several threshold arguments in its defense.  First, it argued that the language in the confidentiality policy does not explicitly prohibit employee activity protected by the NLRA.  The court agreed that the language does not, by its terms, expressly instruct employees not to discuss wages and other terms and conditions of employment with each other.  However, the court stated, the absence of express language prohibiting protected activity still violates the NLRA if “employees would reasonably construe the language” to prohibit protected activity.

Second, Cintas argued that there is no evidence that employees have actually interpreted the language to prohibit any protected activity.  Again, the court found the company’s argument to be insignificant.  What counts is “whether employees would reasonably construe” the disputed language to prohibit protected activity, not “whether employees have thus construed the rule.” 

Third, Cintas argued that it has never actually interpreted or applied the language to prohibit NLRA-protected activity.  This, too, the court found to be irrelevant.  The mere maintenance of a rule likely to chill NLRA-protected activity, whether explicitly or through reasonable interpretation, can amount to an unfair labor practice event absent evidence of enforcement, the court explained. 

The court then turned to the main issue, whether employees would reasonably construe the policy “as precluding them from discussing their terms and conditions of employment with other employees or a union, or would they reasonably understand that the [disputed rule] was designed to protect their employer’s legitimate proprietary business interests.”  The court upheld the Board’s interpretation of the rule as an “unqualified prohibition of the release of ‘any information’ regarding ‘its partners’ [which] could be reasonably construed by employees to restrict discussion of wages and other terms and conditions of employment.”  It is difficult to interpret the rule otherwise, given breadth of the “all-encompassing phrase ‘any information.’”  The court found that the company’s failure to make an effort in the rule to distinguish NLRA-protected behavior from violations of company policy supported the Board’s interpretation.  “A more narrowly tailored rule that does not interfere with protected employee activity would be sufficient to accomplish the Company’s presumed interest in protecting confidential information,” according to the court.

Cintas Corp. v. NLRB, Case No. 05-1305, 05-1340 (D.C. Cir., 3/16/07). [ return to top ]