The recent decision of Quicken Loans v. Lydia E. Garza, Case No. 28-CA-75857 (Jan. 8, 2013) demonstrates how non-union employers may be dragged before the National Labor Relations Board for engaging in routine employment practices frequently performed across the country. So what employers can ignore developments of NLRB law? Apparently none.
Try to guess the violation language of the confidentiality and non-disparagement provisions of the employment agreements Quicken Loans entered into with its mortgage bankers:
Language in Question
The “Proprietary/Confidential Information” provision in the employment agreement prohibited employees from disclosing, among other things, “non-public information relating to . . . the Company’s business, personnel[,] . . . all personnel lists, [and] personal information of co-workers . . . such as home phone numbers, cell phone numbers, addresses and e-mail addresses” to “any person, business or entity.”
The “Non-Disparagement” section barred employees from publicly criticizing, ridiculing, disparaging, or defaming “the Company, its products, services, [and] policies . . . through any written or oral statement . . . .”
Language Deemed Unlawful
The Administrative Law Judge ruled that the confidentiality provision, which prohibited employees from disclosing nonpublic information regarding the employer’s business or personnel, including personnel lists and employee phone numbers and addresses, violated the National Labor Relations Act because it prohibited employees from discussing wages and benefits with their fellow employees or union representatives. Further, the ALJ held that the nondisparagement clause, which prevented employees from publicly criticizing, ridiculing, disparaging or defaming the employer or its products, services, policies, directors or officers, could reasonably be interpreted to prohibit employees from criticizing their employer, which Section 7 of the NLRA permits them to do.
While acknowledging that there is a thin line between lawful and unlawful restrictions, the ALJ found that the two provisions in the Agreement violated the Act because they “would reasonably tend to chill employees in the exercise of their Section 7 rights.
What to Do
HR Managers should add to their to-do checklist to review offer letters, employment agreements, confidentiality provisions, and restrictive covenants to ensure that they do not prohibit:
any express or implied prohibitions on employees discussing their terms and conditions of employment, including prohibit employees discussing wages and benefits, or the names, wages, benefits, or contact information of their co-workers.