On March 24, the D.C. Circuit upheld an order from the National Labor Relations Board that an employee confidentiality agreement was impermissibly overbroad in Banner Health v. NLRB. The confidentiality agreement was a condition of employment at Banner Health System, a large not-for-profit health care system, and forbade employees from discussing the private employee information of coworkers. Included in the list of banned topics of discussion was salary information and disciplinary actions.
Banner Health System argued that the restriction was not, and could not be construed as, a restriction on protected Section 7 rights under the NLRA. Unpersuaded, the D.C. Circuit sided with the NLRB’s reasoning that the confidentiality agreement went further than simply stating a preference for confidentiality of employee information by explicitly banning the sharing of certain information amongst colleagues. The court reasoned that the restrictions in place are “the sort of overbreadth our precedents squarely forbid” and upheld the NLRB’s invalidation of the confidentiality agreement. However the decision was not a complete victory for the NLRB. Court and NLRB precedent have demonstrated that in certain contexts, a company may have an investigative nondisclosure policy.
However the policy cannot be a blanket: investigative nondisclosure can only be invoked on a case-by-case basis where confidentiality is necessary for the investigation. In this case, the NLRB also issued an order that the confidentiality agreement functioned as an unlawful categorical policy of investigative nondisclosure. However, the D.C. Circuit was unpersuaded by the NLRB’s assertion that Banner Health’s nondisclosure policy was categorical and did not uphold that portion of the Board’s order.
Employers should take away from this holding the need to carefully draft employee confidentiality agreements. Employers can either take their chances by using broad language, or may carefully and specifically tailor the language to avoid the appearance of restricting employee Section 7 rights.
Banner Health Sys. V. NLRB, No. 15-1245 (D.C. Cir. Mar. 24. 2017).
