NLRB Affirms Ruling Invalidating Confidentiality and Nondisparagement Handbook Provisions

Author: Beth P. Zoller, XpertHR Legal Editor

July 2, 2013

The National Labor Relations Board (NLRB) continues to declare seemingly neutral handbook provisions and company policies overbroad and a violation of the employee right to engage in protected concerted activity under Section 7 of the National Labor Relations Act (NLRA).

In Quicken Loans, Inc. and Lydia Garza, 359 N.L.R.B. 151 (2013), the NLRB upheld the NLRB Administrative Law Judge's decision declaring certain handbook provisions (regarding confidentiality and nondisparagement) invalid and an unnecessary restriction on employee rights.

Specifically, the NLRB affirmed the ruling that Quicken Loan's handbook provision regarding nondisparagement, which sought to prevent employees from publicly criticizing, ridiculing, disparaging or defaming the employer or its products, services, policies, directors or officers, infringed upon employee's Section 7 rights should be rescinded. The NLRB also determined that portions of a "proprietary/confidential information" provision in the handbook prohibiting employees from disclosing nonpublic information relating to personnel and from disclosing personnel information (such as personnel lists, rosters, home phone numbers, cell phone numbers, home addresses and personal emails) was properly invalidated. The NLRB concluded that these provisions interfered with Section 7 rights by prohibiting employees from discussing wages and benefits with their fellow employees or union representatives. In order to cure the defect, the NLRB suggested reprinting the handbook or providing handbook inserts to correct any unlawful rules.

As a result of this decision and others preceding it, employers should proceed cautiously and make sure that handbook provisions and workplace polices are narrowly tailored and carefully worded in order to avoid infringing upon the right of employees to engage in protected concerted activity. Any provisions that could be reasonably interpreted as preventing or prohibiting employees from working together to collectively improve their wages, hours and working conditions should be carefully evaluated and revised as these provisions may be found to restrict protected activity under the NLRA.