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Should You Designate Your Employee Handbook as “Confidential?” NLRB Says “No”

Employee handbooks are a useful way of bundling together various information and notices that an employer needs and wants to provide to employees. Handbooks are particularly useful for newly-hired employees. Occasionally, the question arises whether an Employee Handbook should be designated as a “confidential” document that cannot be shared among employees and that cannot be shared with third parties. In general, the answer is “No.”

This is the guidance recently released by the National Labor Relations Board (“NLRB”). See In re Nuance Transcription Services, Inc., 28-CA-216065 (NLRB Adv. Memo. November 14, 2018). While many San Diego employers might not be subject to the NLRB’s jurisdiction, policies and guidance provided by the NLRB are often valuable and useful to follow and can disclose emerging legal trends. See our earlier discussion here. In the Nuance case, the employer had the following statement in the Forward of its Employee Handbook: “This handbook and the information in it should be treated as confidential. No portion of this handbook should be disclosed to others, except [the Employer’s] employees and others affiliated with [the Employer] whose knowledge of the information is required in the normal course of business.” As can be seen, the rule did not prohibit employees from discussing the contents of the handbook among themselves but did prohibit dissemination and discussion of the handbook’s contents with third parties.

The NLRB ruled that this “confidential” designation was unlawful. Among the many rights that are protected among unionized employees is the right to discuss pay, benefits, and working conditions. This right extends to discussing these matters with third parties such as union members and employees at other places of work. Among the “benefits” and “working conditions” of employment are the things typically included in an employee handbook. In this sense, an employee handbook is part of a worker’s “working conditions.” Being able to discuss an employee handbook with third parties is a protected activity under federal labor law. As such, according to the NLRB, designating an employee handbook as “confidential” is unlawful.

The rule articulated in the Nuance Advice Memorandum is actually good common sense. A good employee handbook has the following characteristics:

  • Is uniformly applicable to all employees
  • Accurately reflects the company’s policies and procedures
  • Correctly provides notices required by state and federal labor laws

The impetus for “confidentiality” often flows from different rules that might apply to different categories of employees. For example, lower level employees arguably have no need to know the expense reimbursement policies applicable to senior management. The solution is not to designate the employee handbook as confidential, but rather to excise from the handbook policies and information that are properly subject to the “confidential” designation. In other words, provide a stand-alone confidential information sheet for something like senior management expense reimbursements. This allows the employee handbook to be uniformly applicable to all employees and also helps keep the handbook short and readable.

Contact San Diego Corporate Law Today

For more information, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard has extensive experience in drafting and reviewing employee policies, employee handbooks, and employment contracts. Mr. Leonard can be reached at (858) 483-9200 or via email.

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