Recent National Labor Relations Board rulings involving renowned jewelry retailer Tiffany & Co. and a Verizon subsidiary point to a new challenge to employer policies meant to protect confidential and proprietary company information.

Earlier this month, Steven Davis, an administrative law judge with the NLRB, told Tiffany & Co. that its policies were “overly broad” and prevent its employees from exercising their rights under Section 7 of the National Labor Relations Act. Similarly, Cellco Partnership, which does business as Verizon Wireless, faced a similar fate when William Nelson Cates, associate chief judge, stated in July that it too had “overly broad work rules” in its employee’s code of conduct.

Maury Baskin, shareholder at Littler Mendelson and chair of its construction practice group, tells EBN that recent board rulings on questions of confidential business records “have stretched the boundaries of reasonableness.”

“More than ever before, long-established company policies attempting to impose common sense protections of proprietary information are now subject to second guessing by the NLRB under the guise of protecting employee rights,” Baskin says.

Late last year, the NLRB found itself being second guessed by the Supreme Court. The high court said that President Barack Obama overstepped his authority when he named three recess appointees in January 2012 when the Senate was on break. The appointees include Sharon Block, Terrence F. Flynn and Richard F. Griffin, Jr.

After being sworn in as general counsel in November 2013, Griffin Jr. said the board is attempting to lump together McDonald’s and its independent franchises as a joint employer. Griffin, the prior general counsel for the International Union of Operating Engineers, disclosed that his office has “found merit” in some of the charges against the world’s largest fast food company.

Also See: McDonald's labor ruling may be employer ‘train wreck'

Meanwhile, Tiffany & Co. was ordered to “cease and desist” from maintaining a policy that prohibits the disclosure of names, addresses, phone numbers, noncompany email address of employees and employee lists.

Also, the ruling mandates that Tiffany & Co. shouldn’t hold a broad rule regarding outright prohibition of “unauthorized communication in response to requests or questions by media representatives,” Davis said in his Aug. 5 judgment.

For Verizon Wireless, the decision states that the company cannot have policies that prevent employees from disclosing employees’ financial information, telephone information and addresses. Also, it was mentioned that employees should not be prohibited from utilizing company logos. 

According to David Ritter, a partner in the Chicago office of Barnes & Thornburg LLP, the NLRB has “found a home reviewing policies.”

“Anything you write in a policy can be attacked by the NLRB as violating…the broadest section protecting employee rights in the National Labor Relations Act,” Ritter explains to EBN. “In the employer’s context, the NLRB does not look at these policies in the context of running a business.”

He notes that it is very common for companies to have policies stating employees cannot disclose personal information about other employees, referencing how identity theft and the release of personal proprietary information that could be used to steal someone’s identity have become rampant worries for individual consumers.

Also See: Enforcing employer policies outside the workplace

But with the help of a “savings clause,” which is essentially a disclaimer for that can be used in every company handbook, employers can demonstrate in writing that they do not intend to infringe or violate employee legal rights. By taking this route, Ritter says that it “shows the intent of the employer.”

“They [employers] are not trying to violate the law – or infringe on rights – they are trying to do what makes business sense,” he says.

Meanwhile, Baskin, who focuses his Washington, D.C.-based practice on national labor policy, says that all employers should review their policies, with the assistance of legal counsel, to determine whether their codes of conduct “are likely to pass muster under the latest NLRB holdings.”

A Verizon spokesperson disclosed that the company is currently reviewing the decision, but has no comment. Tiffany & Co. could not be reached for comment.  

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