Be Careful Who You Sue - You May Face an NLRA Claim That Your Employment Agreement's Confidentiality, Non-Disclosure, and Non-Disparagement Provisions Violate the NLRA
At the firm’s October 2012 client briefing we discussed the new attitude of the National Labor Relations Board (“NLRB”) and the fact that non-unionized employers were not immune from the provisions of the National Labor Relations Act (“NLRA”). The NLRA has been increasingly applied in non-union workplaces and to handbook policies relating to areas not previously traditionally considered ripe for NLRB consideration, such as at-will employment, social media, intellectual property, confidentiality, contact with the media, and privacy policies. It may then come as little surprise that the NLRB will examine similar provisions to the extent that they are contained in private employment agreements. Most recently, in a NLRB administrative law judge’s decision, provisions contained in a mortgage banker’s employment agreement were found violative of the NLRA. The provisions at issue are fairly typical in employment agreements – confidentiality and proprietary information and non-disparagement. These are the types of provisions commonly used to protect a company’s valuable assets and its reputation.
Not only does this decision, which is discussed in depth in our Advisory, send a message to employers to promptly review and assess their employment agreements and similar contracts containing confidentiality and non-disparagement provisions, it also should lead employers to be extra sensitive to this issue before threatening or filing a lawsuit against former employees. The recent ALJ decision was based on a NLRB charge filed by an employee who had recently been sued by her former employer for violating the no-solicitation/no-contact provisions of her employment agreement. Filing such charges may become yet another tool in the arsenal of defensive litigation tactics considered by former employees. Employers must consider the likelihood of such claims before pulling the trigger on a claim.