Just when you think the NLRA has been expanded as far as it can possibly go, POP!! Along comes a decision yet again expanding the reach of the NLRA and limiting the ability of employers to manage their workforces. The latest such expansion comes from an Administrative Law Judge in an unfair labor practice charge filed against Quicken Loans, Inc., by a former employee, Lydia Garza.
Quicken Loans, as you may have guessed, is not a unionized employer. And Ms. Garza was not a union employee. In fact, she worked for Quicken as a mortgage broker pursuant to a contract that governed the terms and conditions of her employment. As we all well know, though, the NLRA does not apply only to unionized workplaces and the non-unionized employers have become an increasingly frequent target of the NLRA over the last two years.
Ms. Garza and five of her co-workers were sued for breaching their employment contracts, apparently by violating the non-compete and no-raiding provisions of the agreement. In return, Ms. Garza filed an unfair labor practice in which she contended that two of the provisions in the contract violated the NLRA.
The ALJ found that the provisions--a confidentiality and a non-disparagement provision--did, indeed, violate employees' Section 7 rights as provided by the NLRA. No, really, that's what he found.
The confidentiality provision required employees to maintain as confidential:
non-public information relating to the Company's business, personnel . . . all personnel lists, personal information of co-workers . . . personnel information such as home phone numbers, cell phone numbers, addresses and email addresses.
The non-disparagement provision prohibited employees from "publicly criticize, ridicule, disparage or defame the Company or its products, services, [or] policies."
According to the ALJ, there "can be no doubt that these restrictions would substantially hinder employees in the exercise of their Section 7 rights." Well, if I may be so bold, I would suggest that, in fact, there can be plenty of doubt.
Being the practical lawyer that I am, I'd like to put aside for a moment the legal conclusions reached in this opinion and, instead, focus on the business implications. Although many employers and their counsel around the country are groaning over this decision, I contend that not all hope has yet been lost.
Admittedly, the ALJ's conclusion that an employer is not free to contract with its highly compensated professional employees that those individuals will not disparage their employer or steal its confidential and proprietary information is a bit depressing. But keep in mind the remedy, friends. Having found that the provisions violated the NLRA, the remedy ordered by the ALJ was that the provisions be revised. Or, if the employer didn't want to go to the trouble of reprinting new agreements for all of its highly compensated brokers, it could simply provide a single-page addendum, notifying those highly paid employees that the two provisions were rescinded.
Of course, the employer is certainly free to draft new agreements containing revised versions of the provisions. Not all confidentiality provisions are unlawful, even in the current political climate. Nor are all non-disparagement provisions--although it is Is the NLRB In Need of a Dictionary? more difficult to construct one of these that is not likely to raise the eyebrow of an NLRB judge. And, based on the form of the Notice that the employer will be required to post, informing employees of the rescinded provisions, a Section 7 disclaimer may just do the trick.
Of course, there's no guarantees these days. It seems inevitable, though, that, at some point, that Jack will have to get put back into the box.
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