Recently, the First Circuit upheld a labor board ruling that workers could not be prevented from discussing their compensation. In Northeastern Land Services Ltd. v. National Labor Relations Board, the First Circuit agreed with the NLRB that the National Labor Relations Act prohibited a staffing firm from preventing temporary employees from discussing their compensation with others. The staffing firm's temporary employee contract included a confidentiality provision stating that employees who discussed their compensation with “other parties” would be terminated.
The staffing firm fired a temporary employee who included a client of the firm in an email discussion of his wages. The National Labor Relations Board charged the staffing firm with violating Section 7 of the NLRA, which provides that employers may not restrain employees in the exercise of certain rights, including engaging in protected concerted activities such as complaints about wages, hours or working conditions on behalf of themselves and other employees. (Section 7 of the NLRA applies to all workplaces, regardless of whether they are unionized.)
The NLRB concluded that the staffing firm violated the NLRA because employees could reasonably interpret the contract’s provision to prohibit activity protected by the NLRA. The First Circuit agreed, noting that a more narrowly drafted confidentiality provision would be sufficient to accomplish the staffing firm’s goal in maintaining confidentiality in bidding for contracts. Accordingly, staffing firms that wish to protect confidential information should carefully draft confidentiality provisions so that any restrictions are narrowly drawn and do not violate employees’ rights under the NLRA.
Companies should be aware that their staffing firms should exercise caution when drafting confidentiality provisions in order to avoid prohibiting its employees from discussing the wages, hours or working conditions of their employment. Questions or concerns regarding how to protect proprietary information while still staying compliant with the provisions of the NLRA should be addressed by legal counsel.