NLS Group, 744 (2008)

Docket Number:01-CA-39447

Northeastern Land Services, Ltd. d/b/a The NLS Group and Jamison John Dupuy. Case 1–CA–39447

June 27, 2008


By Chairman Schaumber and Member Liebman

On June 27, 2002, Administrative Law Judge Joel P. Biblowitz issued the attached decision. The Charging Party and the General Counsel filed exceptions and supporting briefs. The Respondent filed an answering brief.

The National Labor Relations Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings,[1] and conclusions only to the extent consistent with this Decision and Order.[2]

The complaint alleges that the Respondent violated Section 8(a)(1) of the Act by maintaining in its employment contracts an overbroad confidentiality provision and by terminating employee Jamison Dupuy for breaching that confidentiality provision. The judge dismissed the complaint in its entirety. For the reasons set forth below, we reverse the judge’s decision and find that the Respondent violated Section 8(a)(1) in both respects alleged.

i. facts

The Respondent is a temporary employment agency that supplies labor—including, as relevant here, right-of-way agents who perform various activities related to the acquisition of land rights—to companies in the natural gas pipeline and fiber optic telecommunications industries. Charging Party Jamison Dupuy was employed twice by the Respondent as a right-of-way agent. During the second period of employment, from July to October 2001,[3] the Respondent assigned Dupuy to a project undertaken by Respondent’s client, El Paso Energy. At the outset of both employments, the Respondent required Dupuy to sign its temporary employment agreement. This agreement included the following confidentiality language:[4]

Employee also understands that the terms of this employment, including compensation, are confidential to Employee and the NLS Group. Disclosure of these terms to other parties may constitute grounds for dismissal.

Dupuy experienced delays in receiving his pay on the El Paso project. These delays caused a particular problem for Dupuy because he had to pay for his lodging expenses up front and was reimbursed later. Dupuy had several conversations about this problem with agents of the Respondent, including Executive Vice President and Chief Operating Officer Jesse Green. During one such conversation, Dupuy told Jesse Green that, if the problem could not be resolved, he would be forced to call El Paso Project Manager Rick Lopez[5] to tell him that he was quitting. Green responded that he would call Lopez. Green subsequently told Dupuy that Lopez would not alter their arrangement relating to Dupuy’s lodging expenses.

In early October, Dupuy called Lopez. Dupuy told Lopez that he had not been getting paid in a timely manner, and he asked if it might be possible for him to work for El Paso through a different employment agency. Lopez said that would not be possible.

Also in early October, another pay-related issue arose for Dupuy. At the outset of his employment on the El Paso project, Dupuy arranged with Lopez to be reimbursed by the Respondent $15 per day for the work-related use of his personal computer. Dupuy notified the Respondent of this arrangement, and for a time the Respondent reimbursed Dupuy $15 per day. On October 2, however, Dupuy received an e-mail from the Respondent’s coordinator of human resources, Susan Green, that referred to the computer usage reimbursement rate as $12 per day. Dupuy responded, stating that El Paso had authorized, and he had been receiving, $15 per day for computer usage, and questioning Green’s reference to a $12-per-day rate. The substance of Green’s reply was that tax-related reasons had increased the cost of the reimbursement, requiring an offsetting reduction of $3 per day. Dupuy responded to Green, and copied Lopez at El Paso, in relevant part as follows:

By copy of this email to Rick Lopez, I am asking El Paso to offset your surcharge and additional tax burden. Otherwise . . . I will no longer be using my computer for this job . . . , El Paso will have to furnish me with a digital camera, and I will no longer be available by email. . . . After today and until the matter has been resolved, my equipment is offline.

On October 11, by the happenstance of crossed telephone lines, Dupuy and Jesse Green found themselves speaking to one another on the phone. According to Green’s credited testimony, he told Dupuy that, although the Respondent had done its best to accommodate him, it seemed that the Respondent could never make him happy and, consequently, the Respondent thought it best to terminate his employment. Dupuy answered that the Respondent could not fire him because he had filed a complaint against the Respondent with a State agency.[6] Green replied that the Respondent had cause to terminate Dupuy, as he had “not lived up to [his] end of the bargain with [the Respondent].” In response to a question from the General Counsel, Green confirmed that his statement regarding Dupuy’s “failure to live up to his end of the bargain” was a reference to Dupuy’s failure to comply with his contractual agreement—i.e., the confidentiality provision in the temporary employment agreement—not to disclose the terms of his employment to outside parties.

ii. judge’s decision

The judge dismissed the complaint. First, he found that the confidentiality provision did not violate Section 8(a)(1). Specifically, the judge found that the provision did not prohibit employees from discussing their terms and conditions of employment with one another. He further found that, although the provision did restrict the employees’ right to discuss their terms and conditions of employment with third party clients, the Respondent proffered a legitimate and substantial business justification[7] that outweighed the restriction on employee rights. Second, the judge concluded that, as the confidentiality provision was not unlawful, the Respondent’s termination of Dupuy for violating that provision consequently was not unlawful.

iii. analysis

A. The Confidentiality Provision

In Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), the Board articulated the following standard for determining whether an employer’s maintenance of a work rule violates Section 8(a)(1). If the rule explicitly restricts Section 7 activity, it is unlawful. Id. at 646. If the rule does not explicitly restrict Section 7 activity, it is nonetheless unlawful if (1) employees would reasonably construe the language of the rule to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights. Id. at 647. In applying these principles, the Board refrains from reading particular phrases in isolation, and it does not presume improper interference with employee rights. Id. at 646.

Applying this standard here, we conclude that the Respondent’s confidentiality provision is unlawful because employees reasonably would construe it to prohibit activity protected by Section 7.[8] Specifically, without passing on the judge’s finding that the provision does not prohibit interemployee communications, the provision, by its clear terms, precludes employees from discussing compensation and other terms of employment with “other parties.” Employees would reasonably understand that language as prohibiting discussions of their compensation with union representatives. See, e.g., Bigg’s Foods, 347 NLRB 425, 425 fn. 4 (2006); Cintas Corp., 344 NLRB 943, 943 (2005), enfd. 482 F.3d 463 (D.C. Cir. 2007). Accordingly, the confidentiality provision is unlawfully overbroad at least in this respect, in violation of Section 8(a)(1).

B. Termination of Employee Dupuy

Under extant Board precedent, an employer’s imposition of discipline pursuant to an unlawfully overbroad policy or rule constitutes a violation of the Act. See, e.g., Double Eagle Hotel & Casino, 341 NLRB 112, 112 fn. 3 (2004), enfd. 414 F.3d 1249 (10th Cir. 2005), cert. denied 546 U.S. 1170 (2006); Saia Motor Freight Line, 333 NLRB 784, 785 (2001); Opryland Hotel, 323 NLRB 723 (1997); A.T. & S.F. Memorial Hospitals, 234 NLRB 436 (1978); Miller’s Discount Dept. Stores, 198 NLRB 281 (1972), enfd. 496 F.2d 484 (6th Cir. 1974). As described above, the Respondent’s executive vice president, Jesse Green, testified that Dupuy was discharged due to his failure to comply with the confidentiality provision in his employment contract. As we have concluded that the confidentiality provision was unlawfully overbroad, we accordingly find that the Respondent’s termination of Dupuy pursuant to that provision violated Section 8(a)(1) of the Act.9


Having found that the Respondent has engaged in certain unfair labor practices, we shall order that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. Specifically, having found that the Respondent maintained an overbroad confidentiality rule in its employment contracts, we shall order the Respondent to rescind the rule and notify its employees that the rule is no longer in force. Further, having found that the Respondent unlawfully discharged Jamison Dupuy pursuant to the overbroad confidentiality rule, we shall order the Respondent to offer him reinstatement to his former job or, if that job no longer exists, to a substantially equivalent job. We shall also order the Respondent to make him whole for any loss of earnings and other benefits suffered as a result of the Respondents unlawful action, in the manner set forth in F. W. Woolworth Co., 90 NLRB 289 (1950), along with interest as computed in New Horizons for the Retarded, 283 NLRB 1173 (1987). The Respondent shall also remove from its files all references to the unlawful discharge of Jamison Dupuy and notify him in writing that it has...

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