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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Read more Labor and Employment Law insights
from Margaret (Molly) DiBianca in the Delaware
Employment Law Blog.
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