The NLRB Continues To Go After Non-Union

Employers in Industries it Has Historically

Not Targeted
By: Lawrence P. Postol, Vice President For Legislative Affairs
Lpostol@seyfarth.com
The NLRB Continues To Go After Non-Union Employers in
Industries it Has Historically Not Targeted
In case you still believe that the NLRB crazy ruling are only of concern to unionized
manufacturer employees, think again. The NLRB is targeting white collar non-union employers.
The New York Times recently ran on the front page of its business section a lengthy article
discussing the National Labor Relations Board challenge to a number of provisions of an
employment agreement that Bridgewater Associates, the worlds biggest hedge fund firm,
requires each full-time employee to sign. Under the headline Confronting Wall Streets Secretive
Culture N.L.R.B. Challenges Confidentiality Clauses, the article notes that the Board is
challenging Bridgewaters confidentiality, non-disparagement, and arbitration clauses and went
on to state [t]he unusual action is calling into question longstanding practices and prompting
some companies to re-examine their employment agreements.
With all deference to The Times, however, for a number of years the Board has been
finding confidentiality provisions (see e.g., Target Corporation, 359 NLRB No. 103 (2013)) and
non-disparagement clauses (see Dish Network Corporation, 359 NLRB No. 108 (2013))
unlawful and has steadfastly maintained, despite much criticism from the courts, that clauses
restricting employees to arbitrating disputes are unlawful (D. R. Horton, Inc., 357 NLRB 184

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(2012)). If anything is unusual if unsurprising it is that the Board is going after a hedge
fund.
As the Boards website notes:
The NLRA applies to most private sector employers, including manufacturers, retailers,
private universities, and health care facilities.
Employees at union and non-union workplaces have the right to help each other by
sharing information, signing petitions and seeking to improve wages and working conditions in a
variety of ways. See NLRB Website: FAQs.
The Complaint against Bridgewater (Case Number: 01-CA-169426 (06/30/2016)) is not
the first one in the financial sector. For example, as Seyfarth Attorney Ashley Laken noted, the
D.C. Circuit recently upheld the Boards finding that the confidentiality and non-disparagement
provisions of Quicken Loans employment agreements (see our earlier blog post here) violated
the Act.
Confidentiality agreements, for example, can be drafted to lawfully prohibit the
disclosure of a wide variety of confidential information, see e.g., GC MEMORANDUM OM 1231, Case 7 (pp. 17-18) (a rule by a drugstore chain prohibiting the disclosure of confidential
information lawful where the rule was clearly in the context of not disclosing personal health
information); see also GC MEMORANDUM OM 12-59, p. 20 [Walmart, Case 11-CA-067171]
(finding lawful a rule requiring employees to maintain the confidentiality of the employers trade
secret and confidential information where rule was sufficiently contextualized by examples of
prohibited disclosures (i.e., information regarding the development of systems, processes,
products, know-how and technology, internal reports, policies, procedures or other internal

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business-related communications) for employees to understand that it does not reach protected
communications about working conditions).
It seems reasonably clear, however, that too often the implications of the NLRA for
industries and sectors that have not traditionally had to deal with issues arising under the Act are
not considered. Further, even where they are at least considered, frequently all that is done is to
include a so-called savings clause, stating in effect that nothing contained in an employment
agreement, handbook, or work rule, shall be construed as restricting activity protected by the
National Labor Relations Act. The Board, however, routinely finds such clauses ineffective.
Chipotle Services LLC d/b/a Chipotle Mexican Grill, 364 NLRB No. 72 (2016); see also ISS
Facility Services, Inc., 363 NLRB No. 160 (2016).
As noted, the National Labor Relations Act applies to most private sector employers,
including industries and business sectors that have not traditionally had to deal with issues
arising under its provisions. However, because it provides for only compensatory damages and
generally does not offer the opportunity for attorneys fees, it has generally been ignored by the
Plaintiffs Bar. But in todays digital age, where employees can readily become aware of the
Acts scope via social media and online content providers, the Acts implications need to be
considered by almost all private sector employers when drafting employment agreements,
handbooks, and work rules areas into which the Board clearly is looking to expand its
effective reach.

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HR Professionals Take Note: DOJ and FTC Issue Guidance

Regarding Antitrust Laws in the Employment Context
On October 20, the DOJ and the FTC jointly issued their Antitrust Guidance for HR
Professionals, stating that DOJ intends to pursue employers criminally for alleged wage fixing
and no-poaching agreements. The Guidance explains how antitrust law applies to employee
hiring and compensation practices. The agencies also issued a quick reference card that lists a
number of antitrust red flags for employment practices.
In a nutshell, agreements (whether formal or informal) among employers to limit or fix
the compensation paid to employees or to refrain from soliciting or hiring each others
employees are per se violations of the antitrust laws. Also, even if competitors dont explicitly
agree to limit or suppress compensation, the mere exchange of compensation information among
employers may violate the antitrust laws if it has the effect of suppressing compensation.
The seriousness of this issue is underscored by the agencies statements in their press
releases that the guidance is aimed at putting companies on notice that DOJ will proceed
criminally against wage fixing and no-poaching agreements. There also has been a significant
uptick in recent years in class action litigation and enforcement activity challenging antitrust
violations in the employment context. In one exchange of wage information case in Detroit, a
group of hospitals paid a total of $90 million to settle the case, and in one consolidated case
involving allegations of agreements among employers not to poach each others employees, the
defendants settled for a total of $435 million.
The evidence in many of these cases demonstrates that many HR professionals and other
managers and executives do not realize that the antitrust laws apply in the employment
marketplace just as they do in the commercial marketplace. It is important that those HR
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professionals and other managers and executives who are involved in recruiting, hiring or the
compensation process have a clear understanding of antitrust requirements as applied to those
practices.

2016 by Lawrence Postol

Mr. Postol is the Vice President for Legislative Affairs on the NOVA SHRM
Board, and a partner in the Washington, D.C. office of Seyfarth Shaw LLP. Mr.
Postols acknowledges that his partners deserve the credit for writing most of this
article, for which he thanks them. If you have any questions about the information
in this article, you may e-mail Mr. Postol at Lpostol@seyfarth.com or call him at
202-828-5385.
Disclaimer: This newsletter does not provide legal or other professional
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purposes only as well as to give you general information and a general
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and the newsletter publisher. The newsletter should not be used as a substitute for
competent legal advice from a licensed professional attorney in your state.

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