Confidentiality clause ruled a labor violation

By Michael P. Tremoglie | Jun 20, 2012

PHILADELPHIA (Legal Newsline) - The National Labor Relations Board says employment agreements written by Hyundai Rotem USA Corp. and Aerotek are in violation of labor laws.

The NLRB made this determination on Thursday. The full board adopted an administrative law judge's finding that in the absence of exceptions, a confidentiality provision in the employers' employment agreement violated the National Labor Relations Act.

A complaint was filed by the Transport Workers Union of Philadelphia Local 234 and Administrative Law Judge John T. Clark's decision was affirmed by the full board.

The NLRB also found that the provision in the employment contract was used by Aerotek for their employees outside of the southeastern Pennsylvania area, which was the area at issue in this case. The NLRB ordered Aerotek to notify all other employees who were required to sign an employment agreement containing the confidentiality provision.

The Board left the determination of whether there are other affected employees outside the area at issue to the compliance stage of proceedings.

The complaint was the result of an attempt by the TWU to organize Hyundai employees at two plants in Philadelphia. The union was not approved.

But the union complained to the NLRB that there were unfair labor practices, including a clause in the employment contract stating, "You further agree not to discuss the compensation stated in this agreement, or the compensation paid to you by Aerotek pursuant to any prior employment agreement, in any manner, with the client, the client's employees or any contract employee of the client."

The judge affirmed by the NLRB issued a cease and desist order for the company to stop preventing employees talking about "wages, hours, benefits, and other terms and conditions of employment among themselves, with other employees or with nonemployees."

The NLRB action was criticized by a former member, John Raudabaugh, who is now a professor of labor law at Ave Maria School of Law in Florida.

"Yet another example of the intense focus being given to employer policies, statements, and administrative procedures encroaching, in the Board's view, on Section 7 rights," he said.

"At the same time, a union's successful charge filing demonstrates their value to already represented employees and serves as an inroad to organizing non-union workforces. Its 'low-hanging' fruit and employers must pay heed, review their documents, and avoid the issue."

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