EMPLOYMENT AGENCIES AND EMPLOYEE CONFIDENTIALITY POLICIES

By: Jane Lewis Volk, Esquire jlv@muslaw.com

A federal appeals court recently affirmed an order of the National Labor Relations Board granting reinstatement and back pay to an employee of a temporary employment agency who had been discharged pursuant to an employee confidentiality agreement which was held to be unlawful under the National Labor Relations Act (“NLRA”). (Northeastern Land Service v. NLRB, U.S. Court of Appeals for the First Circuit, decided March 13, 2009.)

The agency required their employees to sign an employment agreement containing a confidentiality clause prohibiting them from disclosing the terms of their employment to “other parties.” In this case, the employee had complained about his wages to the company where he was assigned (the client of the employment agency). He was fired for violation of the confidentiality clause.

The NLRA protects employees’ rights to freely discuss the terms and conditions of their employment among themselves (yes, even in non-union settings). This disclosure was not to a fellow employee as anticipated by the NLRA, but to the client. However, the NLRB and the court of appeals reasoned that the confidentiality agreement would chill those free discussion rights and thus was an unlawful agreement. Any firing under that policy was therefore violative of the NLRA.

While you undoubtedly do not want the individuals whom you place with your clients to be complaining in their workplaces about the terms of their employment, making them sign such a confidentiality agreement is not the way to go. The other important message from this decision is a reminder that the NLRA applies to non-union employers, contrary to conventional wisdom (which is so often wrong).