Employer Lawfully Terminates Employee for Violating Unlawful Work Rule

If there is a “Golden Rule” of labor relations, it is that companies cannot prohibit employees from discussing wages. But, companies can stop workers from discussing other financial aspects of a business. Flex Frac Logistics had a confidentiality rule that, among other things, prohibited employees from discussing rates and margins charged by Flex Frac to its clients. Ms. Lopez, a member of the accounting department told another employee that Flex Frac “was screwing over” its drivers because Flex Frac charged client companies far more than it was paying out. That employee reported this event to her supervisor. Days later, Flex Frac began receiving phone calls from clients, armed with financials of the company, demanding more money. Flex Frac terminated Lopez for violating the company’s confidentiality rule concerning client rates.

The National Labor Relations Board determined that the confidentiality policy violated the National Labor Relations Act, but terminating the employee did not violate the Act because discipline that is imposed pursuant to an unlawful work rule “is unlawful only if the employee violated the rule by 1) engaging in protected conduct or 2) engaging in conduct that otherwise implicates the concerns underlying Section 7” of the Act.

Although the confidentiality policy was ultimately determined to be unlawfully overly broad, the Board held that the employee knew Flex Frac had a legitimate business interest in keeping its client rates confidential and used her position in the accounting department to access the rates and make them public thereby causing Flex Frac’s business to suffer. This is a rare recent win for employers from the NLRB; enjoy it while it lasts.

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