Do you think it could possibly violate any law to require at-will non-union employees to sign a confidentiality agreement prohibiting disclosure outside the company of information relating to customers, marketing procedures, costs, prices, business plans, computer and software systems, and “personnel information and documents?” If you answered “of course not!” you would be WRONG under the National Labor Relations Act according to the NLRB!

In a September 11, 2012 decision (Flex Frac Logistics, LLC, Case No. 16-CA-027978) the NLRB ruled that this agreement interfered with Section 7 rights under the NLRA. The Board so concluded because the clause prohibiting the sharing of “personnel information and documents” might be read by a “reasonable employee” as applying to a discussion of the terms and conditions of employment with some union representatives who might be in these employees’ future.  The Board stated that it “has repeatedly held that non-disclosure rules with very similar language are unlawfully overbroad.”  It cited a total of two cases for support of this conclusion; one from the 2011 Board with a majority appointed by President Obama, and the other from 2001, whose majority consisted of President Clinton holdovers.

This case illustrates the extent to which the current NLRB will, through a malleable “reasonable employee” standard, invalidate what most employers have long considered standard and reasonable confidentiality rules.   The Board reaches these counter-intuitive conclusions by contending that such rules will chill communications that are deemed to involve “protected concerted activity,” even involving at-will employees who are not union-represented.  Unless and until one of these decisions is taken up on appeal and rejected by a court, employers will have to contend with the impact of these rulings.