Recently, the United States Court of Appeals for the Second Circuit held that an employer violated the National Labor Relations Act (NLRA) by terminating an employee for refusing to sign an unlawful confidentiality agreement. The agreement required employees to maintain confidential information protected by HIPAA, but it then went further and “strictly prohibited” employees from disclosing information with respect to all “non-public information intended for internal purposes,” including “administrative information such as salaries and the contents of employment contracts.”
Section 7 of the NLRA guarantees employees "the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” Section 8(a)(1) of the Act makes it an unfair labor practice for an employer "to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7" of the Act.
All employees covered by the NLRA, regardless of whether they are unionized, have the right to engage in what is considered “protected concerted activity” under the NLRA, and discipline based on any policy that restricts concerted activity is unlawful. While a lawful confidentiality policy could prohibit HR or accounting staff from discussing the salaries of other employees, such a policy could not prohibit employees' discussing their own compensation rate or asking their coworkers to discuss their compensation.
Employers should review all HR policies to be sure they don’t unwittingly violate Section 8(a)(1) of the National Labor Relations Act by infringing upon employee rights protected in Section 7.
Employers with Directors and Officers insurance, including Employment Practices Liability coverage, through Bukaty Companies, have access to free, unlimited consultations with an Employment Risk Manager.
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