NLRB Finds Information Security Rule Illegal, But Dissent Asserts Context Shows It's Legal

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By Lawrence E. Dubé  

Aug. 1 — A California grocery chain committed an unfair labor practice when it instructed workers to keep employee information “secure” and to use it fairly, lawfully, and only for its intended purpose, the National Labor Relations Board 2-1 held July 31.

NLRB Chairman Mark Gaston Pearce and Member Nancy J. Schiffer said employees would reasonably understand the provision in Fresh & Easy Neighborhood Market's code of conduct as a ban on discussing or disclosing employee wages and employment conditions. Merely maintaining the provision interfered with employee rights and violated Section 8(a)(1) of the National Labor Relations Act, the board found.

Member Harry I. Johnson dissented, finding employees who read the Fresh & Easy rule in context would understand the company was not trying to preclude them from talking about wages and working conditions. Johnson warned the board's majority may be moving toward a presumption that some rules are unlawful unless they include an explicit exception for NLRA-protected activity.

One-Sentence Rule in Dispute

According to the decision, an NLRB regional director issued a complaint against the grocer based on an allegation by the United Food and Commercial Workers that the employer's code of conduct interfered with the rights of employees under Section 7 of the NLRA to engage in union activity or protected concerted activity for their mutual aid or protection.

Fresh & Easy maintained a 20-page “Code of Business Conduct” on its website and advised employees that breaches of the code may result in disciplinary action.

In a section titled “Confidentiality and Data Protection,” the employer included the following rule: “Keep customer and employee information secure. Information must be used fairly, lawfully and only for the purpose for which it was obtained.”

UFCW and the NLRB's then-acting general counsel alleged that the provision violated NLRA Section 8(a)(1), which prohibits action that interferes with, restrains or coerces employees in the exercise of Section 7 rights. An administrative law judge disagreed, and dismissed the complaint, but the board reversed and found a violation of the act.

Majority Sees Infringement of Employee Rights

In Lutheran Heritage Village-Livonia, 343 N.L.R.B. 646, 176 LRRM 1044 (2004), the board held that even if an employer rule does not explicitly restrict Section 7 activity, maintaining the rule will be considered an unfair labor practice if the rule was promulgated in response to union activity or was used by the employer to restrict protected activity, or if “employees would reasonably construe the language to prohibit Section 7 activity.”

Finding Fresh & Easy's rule ran afoul of the Lutheran Heritage test, Pearce and Schiffer said the board has “repeatedly found rules with similarly overbroad phrasing to be unlawful because they infringe upon rights protected by Section 7 of the Act.”

The challenged code of conduct provision said: “Keep customer and employee information secure. Information must be used fairly, lawfully and only for the purpose for which it was obtained.”

The grocer's rule would be understood by employees as prohibiting protected uses of “employee information,” the board majority said.

Fresh & Easy's instruction that information should be used “only for the purpose for which it was obtained” reinforced that impression, Pearce and Schiffer said, “as the Respondent's business purpose clearly does not include protected discussions of wages or working conditions with fellow employees, union representatives, or Board agents.”

Dissent Argues for More Focus on ‘Overall' Context

But Johnson, dissenting, agreed with the ALJ that employees would not view the rule as a prohibition of Section 7 activity.

The board member said the NLRB has issued more than 50 decisions applying Lutheran Heritage. In nearly two-thirds of those cases, the issue was whether employees could reasonably view rules as illegal restrictions, Johnson said. He found that in a majority of the cases, there was no finding rules were illegally applied, only a question about whether maintaining an overbroad policy was unlawful.

“[I]n light of the frequency that the Board decides this particular type of Lutheran Heritage case,” Johnson wrote, “it is prudent that the Board apply one systemic methodology to ensure consistent and predictable decisions that both employers and employees can rely on for guidance.”

The dissenting board member argued “the best approach is to examine the overall context of a disputed rule—from the general purpose of the document in which the rule is contained, its introduction, its general sections and topics and accompanying explanatory texts, and finally to the disputed rule and the text around it—to give a rule a reasonable reading.”

Stating that employers issue handbooks and policy statements “in an attempt to comprehensively cover many topics” and to protect the interests of the employer and its employees, Johnson said employment rules should not be construed “to presume a malicious intent on the part of the employer.”

Johnson said reading the disputed Fresh & Easy rule in the context of the entire code of conduct would show employees the employer was primarily addressing ethical concerns rather than employment conditions, and the rule did not chill employees' exercise of their rights under the NLRA.

To contact the reporter on this story: Lawrence E. Dubé in Washington at

To contact the editor responsible for this story: Susan J. McGolrick at

Text of the opinion is available at

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