The DC Circuit recently upheld a ruling by the National Labor Relations Board that Quicken’s confidentiality and non-disparagement provisions in its Mortgage Banker employment agreements violated Sections 7 and 8(a)(1) of the National Labor Relations Act. The confidentiality provision at issue prohibited employees from disclosing nonpublic information regarding the company’s personnel, including personnel lists, handbooks, personnel files, and personnel information of coworkers such as phone numbers, addresses, and email addresses. The non-disparagement provision prohibited employees from publicly criticizing, ridiculing, disparaging or defaming the company or its products, services, policies, directors, officers, shareholders or employees. The NLRB contended that broad prohibitions such as those interfered with employees’ rights to engage in “concerted activity” (basically, organize to unionize) by chilling their ability to speak freely about employment conditions or gather and use contact information to engage in discussions with other employees regarding those conditions. The ruling is consistent with a trend in NLRB rulings invalidating social media rules (i.e., when an employee is terminated for criticizing management on Facebook). This ruling does not prohibit such provisions in employment agreements (or handbooks where it also frequently appears). It does mean, though, that language should be carefully crafted and lawful concerted activity specifically carved out if such provisions are to be enforceable.
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