NLRB Holds Engineering Firm Committed Unfair Labor Practice

By: Christopher S. Drewry

Over the course of the past year, the National Labor Relations Board (“NLRB”) is the federal agency that has arguably made the biggest push to expand its reach and relevance.  While the National Labor Relations Act (“NLRA”) has always protected the rights of all employees – both union and non-union – the focus of the NLRB has traditionally been on unionized workplaces.  However, the NLRB has shifted its focus from traditional labor matters toward the rights of non-union employees.  Such decisions have impacted companies on business-related issues involving their employment “at-will” disclaimers, social media policies, confidentiality of investigations, as well as other employee handbook policies.  Non-union companies involved in the construction industry (and even those not engaged in traditional labor activities) should take note of this trend by the NLRB, including a decision handed down last week in Jones & Carter, Inc./Cotton Surveying Company v. Teare.

In Teare, the NLRB addressed the viability of an employer’s confidentiality rule prohibiting discussions among employees about their salaries.  The case involved allegations that Jones & Carter, an engineering and surveying firm located in Houston, unlawfully maintained a rule in its employee handbook that prohibited such discussions.  Further, Teare was alleged to have been terminated because she engaged in concerted activities with other employees for the purposes of mutual aid and protection by discussing salaries and because she violated Jones & Carter’s unlawful rule.  One of the basic issues in the case was whether Jones & Carter’s confidentiality rule that prohibited employees from discussing their salaries was overly broad, thereby resulting in an unfair labor practice in violation of §8(a)(1) of the National Labor Relations Act (“NLRA”), which prohibits an employer from interfering with, restraining, or coercing employees in the exercise of their §7 rights (i.e., those rights to self-organize, to form, join, or assist labor organizations, to bargain collectively, and to engage in other concerted activities for  the purpose of collective bargaining).

At trial, Jones & Day said the employee was terminated for “harassing” other workers.  However, the Administrative Law Judge (“ALJ”) found that Teale was, in fact, fired for discussing salaries with other workers, and that sharing such information was a “pet peeve” of the company.  The ALJ and the NLRB (upholding the ALJ’s determination) held that the engineering firm unlawfully fired the employee for discussing salary information with co-workers, and ordered Jones & Day to offer reinstatement and to pay back wages for the time out of work.  Additionally, under the NLRB order, the company also must rescind its policy of forbidding employee discussion of salaries on the basis that the NLRA protects the rights of workers to discuss their terms and conditions of employment, including wages.  Ultimately, Jones & Day had to pay Teare (who declined reinstatement to her former position) back pay, 401(k) contributions, medical expenses and interest in the total amount of $107,000.

From an employment law standpoint, the NLRB’s decision that this type of confidentiality rule is prohibited is not unexpected in light of prior cases extending the trend toward increased transparency among employees at least with respect to salaries.  However, Teare is also part of the ongoing trend wherein the NLRB has sought to expand its reach to non-traditional labor matters and, more significantly, to non-union workplaces.  From that standpoint, Teare stands as yet another warning to both union and non-union employers alike to review and update their employee handbooks to account for the increased NLRB focus on employment policies and procedures.