NLRB Provides Clarity on Confidentiality and Media Contact Rules

In LA Specialty Produce Co., the National Labor Relations Board (the Board) applied its Boeing framework to an employer’s Confidentiality and Media Contact rules, finding both to be lawful. As the Board set forth in the 2017 case, The Boeing Company (which we discussed in detail in a December 2017 E-lert), workplace rules are divided into three categories, depending on whether they (1) are lawful, (2) warrant individualized scrutiny, or (3) are unlawful under the National Labor Relations Act.

Confidentiality Rule: An administrative law judge initially found this rule was unlawful, reasoning that the rule could be reasonably read to prohibit employees from sharing customer and vendor names with third parties, such as a union:

Every employee is responsible for protecting any and all information that is used, acquired or added to regarding matters that are confidential and proprietary of [the employer] including but not limited to client/vendor lists…

The Board, however, concluded that the rule does not prohibit employees from disclosing names of employer customers and vendors to third parties. Rather, the rule prohibits disclosure of client/vendor lists, which contain sensitive information about pricing and discounts, and confirms that the language at issue applies only to the employer’s non-public, proprietary records. Thus, the Board found that an objectively reasonable employee would not interpret the Confidentiality Rule as potentially interfering with their rights under the NLRA.

Media Contact Rule: The employer’s Media Contact rule, which the administrative law judge also found unlawful, provides:

Employees approached for interview and/or comments by the news media, cannot provide them with any information. Our [company president] is the only person authorized and designated to comment on Company policies or any event that may affect our organization.

The Board first acknowledged that employees have the right to speak with the media regarding working conditions, labor disputes, and other terms and conditions of employment. The Board found that this rule, when reasonably interpreted, provides only that employees cannot speak on the employer’s behalf if approached by the media. The Board reasoned that the words “authorized and designated” would be read by an objective reasonable employee to mean that only the employer’s president may speak to the media on the employer’s behalf.

Board Creates Stability: With respect to each rule, the Board held that it will characterize such rules to be lawful “Category 1” rules under Boeing. Category 1 rules are lawful either because the rule when reasonably interpreted does not prohibit or interfere with rights protected by the NLRA (now referred to as “Category 1(a) rules” after this case), or the potential adverse impact on protected rights is outweighed by justifications associated with the rule (the Board will now consider these “Category 1(b) rules”).  The Board found each will be considered Category 1(a) rules under the Boeing framework.

Takeaway: This decision provides useful guidance for employers. Going forward, the Board – at least this Board – will hold rules prohibiting disclosure of non-public and proprietary information and prohibiting employees from speaking to the media on the company’s behalf to be lawful. Notwithstanding this decision, however, employers should clearly articulate that employees may not comment on the company’s behalf and should designate an individual with the responsibility for speaking on the employer’s behalf to the media.