On March 24, 2014, the Fifth Circuit Court of Appeals issued a well reasoned ruling DENY Flex Frac’s petition for review and ENFORCE the NLRB’s order.Flex Frac Logistics, L.L.C. v. N.L.R.B., 12-60752, ___ F. 3d ___, 2014 WL 1178698 (5th Cir. Mar. 24, 2014), https://www.ca5.uscourts.gov/opinions/pub/12/12-60752-CV0.pdf
In doing so, the appellate court provides guidance to companies that requires employees to sign a confidentiality agreements. Confidentiality agreements in general are popular with companies that wishes to protect technology and trade secrets that give them a competitive advantage in the market place. Unfortunately broadly worded confidentiality agreement may run afoul of labor laws. A “workplace rule that forb[ids] the discussion of confidential wage information between employees . . . patently violate[s] section 8(a)(1).” NLRB v. Brookshire Grocery Co., 919 F.2d 359, 363 (5th Cir. 1990). Poorly drafted confidentiality agreements that may restrict employees from discussing rate of pay with each other may be held illegal by the National Labor Relations Board (NLRB). Flex Frac Logistics had a confidentiality agreement that was found to be illegal by the NLRB. While Flex Frac’s confidentiality agreement did not specifically mention wage info, it was broad enough to prohibit discussion about them. The NLRB held that this confidentiality agreement was an unfair labor practice under the National Labor Relations Act (NLRA) The company appealed and lost.
