Confidentiality Obligations Interfere with Protected Rights

Many employers, particularly those in Silicon Valley, prohibit employees from using or disclosing “confidential information.”  Many employee handbooks have policies limiting employee discussions regarding confidential business information outside the workplace.  Employers typically use very broad definitions of “confidential information,” and, according to the General Counsel for the National Labor Relations Board, the confidentiality obligations may interfere with protected rights.

On March 18, 2015, Richard F. Griffin, Jr., General Counsel for the NLRB issued a report concerning recent employer rule cases.  The report discusses different policies and workplace rules that the NLRB determined violated employee Section 7 rights.  According to the General Counsel, “Under the Board’s decision in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), the mere maintenance of a work rule may violate Section 8(a)(1) of the Act if the rule has a chilling effect on employees’ Section 7 activity.”

Employees have a Section 7 right to discuss wages, hours, and other terms and conditions of employment with fellow employees, as well as with nonemployees, such as union representatives. Thus, according to the General Counsel,

an employer’s confidentiality policy that either specifically prohibits employee discussions of terms and conditions of employment— such as wages, hours, or workplace complaints—or that employees would reasonably understand to prohibit such discussions, violates the Act. Similarly, a confidentiality rule that broadly encompasses “employee” or “personnel” information, without further clarification, will reasonably be construed by employees to restrict Section 7-protected communications.

Citing Flamingo-Hilton Laughlin, 330 NLRB 287, 288 n.3, 291-92 (1999).

In contrast, broad prohibitions on disclosing “confidential” information are lawful so long as they do not reference information regarding employees or anything that would reasonably be considered a term or condition of employment, employers have a substantial and legitimate interest in maintaining the privacy of certain business information.

Citing Lafayette Park Hotel, 326 NLRB 824, 826 (1998), enforced, 203 F.3d 52 (D.C. Cir. 1999); Super K-Mart, 330 NLRB 263, 263 (1999).

The report covers several areas, but for today’s article I wanted to point out a few of the rules regarding confidentiality discussed by the General Counsel.  You can review the entire report here.

Rules That Interfere with Protected Rights

The General Counsel found the following rules regarding confidentiality would unlawfully interfere with protected rights:

  • Do not discuss “customer or employee information” outside of work, including “phone numbers [and] addresses.”
  • “Never publish or disclose [the Employer’s] or another’s confidential or other proprietary information. Never publish or report on conversations that are meant to be private or internal to [the Employer].”
  • “Discuss work matters only with other [Employer] employees who have a specific business reason to know or have access to such information.. .. Do not discuss work matters in public places.”

Rules That Do Not Interfere with Protected Rights

The General Counsel found the following rules regarding confidentiality would not unlawfully interfere with protected rights:

  • No unauthorized disclosure of “business ‘secrets’ or other confidential information.”
  • “Misuse or unauthorized disclosure of confidential information not otherwise available to persons or firms outside [Employer] is cause for disciplinary action, including termination.”
  • “Do not disclose confidential financial data, or other non-public proprietary company information. Do not share confidential information regarding business partners, vendors or customers.”
  • Prohibition on disclosure of all “information acquired in the course of one’s work” when “nested among rules relating to conflicts of interest and compliance with SEC regulations and state and federal laws” such that employees would reasonably understand the information described as encompassing customer credit cards, contracts, and trade secrets, and not Section 7-protected activity.

California employers should also be aware that California’s revised Equal Pay Act now prohibits employers from interfering with employees’ right to discuss their own wages as well as other employee wages.

Employers should carefully review their existing confidentiality agreements and workplace rules to ensure they do not interfere with protected rights.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

Inability to Work Under Particular Supervisor Not a Disability

A California court recently reaffirmed that the inability to work under a particular supervisor because of anxiety and stress related to the supervisor’s standard oversight of job performance—is not a disability recognized under California’s Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.).

Higgins-Williams worked as a clinical assistant for Sutter Medical Foundation’s Shared Services doing patient intake. In 2010, Higgins told her doctor she was stressed because of interactions at work with human resources and her manager.  Her doctors diagnosed her as having adjustment disorder with anxiety, and Higgins went on a stress-related leave of absence under the California Family Rights Act and the Family Medical Leave Act. The doctor reported Higgins’ disabling condition as “…stress[] when dealing with her Human Resources and her manager.”

When Higgins returned to work, she received her first negative performance evaluation since she began working at Sutter.  Higgins believed she was being singled out, and that her supervisor “was curt and abrupt with plaintiff, while being open and friendly with plaintiff’s coworkers, and gave plaintiff a disproportionate share of work.”  Plaintiff requested a transfer to a different department for “…forever”), a schedule of 9:00 a.m. to 6:00 p.m., and another leave of absence.  Plaintiff made the requests in order to accommodate her alleged disability: adjustment disorder with anxiety.

Sutter granted the leave of absence, but refused to transfer her to a different department with a different manager.  Higgins’ doctor continued to extend the leave of absence because Sutter never agreed to transfer Higgins to a different department with a different manager.  The doctor opined that although Higgins could return to work as a clinical assistant, the doctors was concerned about Higgins’ ability to do so in the same department as her regional manager.  Sutter eventually terminated Higgins because there was no indication Higgins would ever be able to return to her job.

Inability to Work Under Particular Supervisor Not a Disability

Higgins sued Sutter for disability discrimination and failure to accommodate.  The appellate court held:

An employee’s inability to work under a particular supervisor because of anxiety and stress related to the supervisor’s standard oversight of the employee’s job performance does not constitute a disability under FEHA, citing Hobson v. Raychem Corp. (1999) 73 Cal.App.4th 614, 628 [“the inability to perform one particular job, or to work under a particular supervisor, does not constitute a qualified disability” under FEHA].

Because the court determined the plaintiff did not have a “disability,” the remaining disability-related causes of action were dismissed.

California and federal law define “disability” very broadly, but that doesn’t mean every stress or anxiety requires an accommodation.  When the requested accommodation is a different supervisor, courts are reluctant to hold an employer liable for disability discrimination.  Employers must take every request for a disability accommodation seriously.  When properly conducted, the employer and employee should engage in an interactive process to determine what reasonable accommodations will enable the person to perform the essential functions of the job.

The Nuddleman Law Firm represents employers and employees regarding disability accommodations and discrimination.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

Where Can I Sue?

 

When Rachel Verdugo began working for Alliantgroup, L.P., she signed an employment agreement agreeing to file any employment-related lawsuits in Harris County, Texas, and agreeing that Texas law governed all disputes. Verdugo had to first address the question, Where Can I Sue? When Verdugo tried to sue in California, the trial court said she had to file in Texas.  Verdugo appealed contending the trial court erred because enforcing the forum selection clause and related choice-of-law clause violated California’s public policy on employee compensation.  The California court of appeal agreed and reversed the trial court’s order.

Where Can I Sue? Enforcing Forum Selection Clauses

Although a party opposing enforcement of a forum selection clause ordinarily bears the burden to show enforcement would be unreasonable or unfair, the burden is reversed when the underlying claims are based on statutory rights the Legislature has declared to be unwaivable.  In that instance, the party seeking to enforce the forum selection clause has the burden to show enforcement would not diminish unwaivable California statutory rights. Otherwise a forum selection clause could be used to force a plaintiff to litigate in another forum that may not apply California law.

Verdugo based all her claims on Labor Code provisions that not only establish when and how employers must pay overtime and other forms of compensation, provide meal and rest breaks, and provide accurate wage statements to all California employees, but also establish specific remedies for an employer’s violation of these provisions, including recovery of unpaid wages, interest, civil penalties, and attorney fees.  To protect these important rights and remedies, the Labor Code declares they cannot be waived by agreement.

Alliantgroup failed to show enforcing the forum selection clause and related choice-of-law clause in Verdugo’s employment agreement would not diminish her statutory rights by requiring her to litigate her claims in Texas under Texas law.  Alliantgroup contended Verdugo’s statutory rights would not be affected by enforcing the forum selection clause because a Texas court “most likely” would reject the parties’ choice-of-law clause and apply California law.  Alliantgroup’s supposition about what a Texas court is likely to do was not sufficient to meet its burden because Alliantgroup’s arguments on appeal suggested it would argue against applying California law if the case was litigated in Texas, and Alliantgroup did not cite any authority that convinced the court that a Texas court would necessarily apply California law.

The few cases Alliantgroup cited did not address how a Texas court would view a choice-of-law clause in the context of a wage and hour dispute between a Texas employer and a California employee.  Alliantgroup did not address the competing policies of the two states.  Alliantgroup could have eliminated any doubt about which law would apply to Verdugo’s claims by stipulating to have the Texas courts apply California law, but failed to do so.  Instead, Alliantgroup carefully phrased its arguments in terms of vague possibilities while simultaneously seeking to minimize the significance of the California statutory rights on which Verdugo bases her claims.  Alliantgroup therefore did not show Verdugo’s unwaivable statutory rights would not be diminished.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

Disability Discrimination Plaintiff Not Required to Prove Ill Will

Sheriff’s Deputy Dennis Wallace brought a disability discrimination case against the County of Stanislaus (County) under FEHA (Government Code section 12940) after the County removed him from his job as bailiff and placed him on an unpaid leave of absence.  Wallace wanted to continue doing his job, but the County believed Wallace could not safely perform the job. At trial, Wallace was able to show he could safely perform the job with accommodations. The County argued that even if it was wrong, the mistake was reasonable and Wallace could not prove animus or ill will.

Court Incorrectly Held Disability Plaintiff Must Prove Animus or Ill Will

The trial court believed the employee had to prove “animus or ill will” in order to prevail.  The trial court modified the jury instruction (CACI No. 2540) to include a requirement that Wallace prove County regarded or treated him “as having a disability in order to discriminate.”

On appeal, the court concluded the jury instruction and special verdict form contained error.  The proper standard regarding employer intent or motivation was decided by the Supreme Court in Harris v. City of Santa Monica (2013) 56 Cal.4th 203 (Harris).

Animus or Ill Will Not Required.

Disability Plaintiff Protected from erroneous or mistaken believes About Employee’s Ability to Perform the Job.

Under Harris, Wallace could prove the requisite discriminatory intent by showing his actual or perceived disability was a “substantial motivating factor/reason” for County’s decision to place him on a leave of absence. California law does not require an employee with an actual or perceived disability to prove that the employer’s adverse employment action was motivated by animosity or ill will against the employee.  Instead, employees are protected from an employer’s erroneous or mistaken beliefs about the employee’s physical condition.  (§ 12926.1, subd. (d).)

In short, the Legislature decided that the financial consequences of an employer’s mistaken belief that an employee is unable to safely perform a job’s essential functions should be borne by the employer, not the employee. Even if the employer’s mistake was reasonable and made in good faith, the employee is not required to prove the employer’s decision was motivated by animus or ill will.

The court remand Wallace’s disability discrimination claim for a retrial limited to determining the amount of damages resulting from County’s decision to place Wallace on an unpaid leave of absence.  The court believed a limited retrial was appropriate because the jury found that (1) County regarded or treated Wallace as if he were disabled, (2) Wallace was able to perform the essential job functions of a deputy sheriff with or without reasonable accommodation, and (3) County failed to prove Wallace’s disability would increase the danger to himself or others while he performed those job functions.

The court held that as a matter of law, the reason the County placed Wallace on a leave of absence was its mistaken belief that he could not safely perform the essential job functions of a deputy sheriff.  Therefore, the substantial-motivating-reason element was proven.  The court also found, as a matter of law, that the County’s decision to place Wallace on leave was a substantial factor in causing Wallace to suffer economic losses.  Based on those findings, the court determined the retrial could be limited to the amount of Wallace’s damages.

The lesson for employers is to not presume an employee is unable to safely perform the essential functions of the job just because the employee has a disability.  Placing an employee on a leave of absence against the employee’s will when the employee can perform the essential functions of the job with a different accommodation could lead to significant liability.