This decision by Administrative Law Judge Andrew S. Gollin addresses allegations that Hoffmann Brothers Heating and Air Conditioning, Inc. (the "Respondent") violated Section 8(a)(1) of the National Labor Relations Act ("the Act") by maintaining an overly broad Confidentiality provision in its Employee Non-Compete/Confidentiality Agreement and a Confidential Information Policy in its Employee Handbook. The General Counsel argued that these provisions and policy prohibited employees from disclosing or using "confidential information," including wage and benefit data, employee lists, and telephone numbers, and that they would reasonably chill employees' exercise of their Section 7 rights. The Respondent contended that these measures were necessary to protect legitimate business interests and could not be more narrowly tailored.

The ALJ found that the Respondent engaged in unfair labor practices by maintaining the challenged provisions and policy. Regarding the Confidentiality provision in the Original Agreement, the ALJ determined that its broad definition of "confidential information" encompassed information related to wages, benefits, and employee lists, thereby explicitly restricting Section 7 activity. The ALJ rejected the Respondent's arguments that the provision was narrowly tailored by contextual elements like the "Fair Competition" heading or the adjacent non-solicitation clause, finding these insufficient to overcome the explicit restrictions.

The ALJ then examined the modified Confidentiality provision in the Revised Agreement. While acknowledging the Respondent's attempt to clarify the provision with added language, the ALJ concluded that it remained unlawful. The phrase "[t]o the greatest extent permitted by law" was deemed insufficient because employees are not expected to possess legal expertise. Furthermore, the additional language allowing discussion of "terms and conditions of employment" was found to be ambiguous regarding wages and benefits, and it failed to address the disclosure of information to third parties like unions or the public. The final restriction on using confidential information "to the detriment of [the Respondent]" was also deemed overly broad.

Finally, the ALJ addressed the Confidential Information Policy in the Employee Handbook. The ALJ found this policy to be presumptively unlawful due to its broad definition of "business-related information," the prohibition of disclosure to "anyone outside the Company," and the inclusion of terms like "financials" and "team member contact information" which could reasonably be interpreted to encompass protected Section 7 activity. The policy's savings clause, stating it was not intended to "inhibit normal business communications" or "infringe upon team member rights," was found insufficient because it did not specifically address the broad panoply of rights protected by Section 7.

Consequently, the ALJ recommended finding that the Respondent violated Section 8(a)(1) by maintaining all three provisions and ordered the Respondent to rescind them, notify affected employees, and post an appropriate notice.

Significant Cases Cited

• Stericycle Inc., 372 NLRB No. 113 (2023): This case established the current two-part standard for determining whether a facially neutral provision violates Section 8(a)(1), requiring the General Counsel to prove a reasonable tendency to chill Section 7 rights, and allowing the employer to rebut this presumption by demonstrating a legitimate business interest and the inability to advance it with a more narrowly tailored provision.
• Eastex, Inc. v. NLRB, 437 U.S. 556 (1978): This Supreme Court case affirmed that employees' concerted communications regarding terms and conditions of employment, even when directed to external entities, are protected by Section 7 of the Act.
• Lafayette Park Hotel, 326 NLRB 824 (1998): This case established that in determining whether a provision violates Section 8(a)(1), the Board examines whether it would reasonably tend to chill employees in the exercise of their Section 7 rights, and that maintenance of an unlawful provision violates the Act even without evidence of enforcement.
• Cintas Corp., 344 NLRB 943 (2005): This case found that a rule protecting the confidentiality of various company information, including financial matters, violated Section 8(a)(1) because it could be reasonably construed to restrict employees' discussions of wages and other terms and conditions of employment.
• First Transit, Inc., 360 NLRB 619 (2014): This case held that a savings clause may, in certain circumstances, clarify the scope of an otherwise ambiguous and unlawful restriction, but the Board considers factors such as whether the clause addresses the broad panoply of Section 7 rights and its placement within the document.

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