Fifth Circuit upholds NLRB order in Flex Frac Logistics case

The Fifth Circuit found that Flex Frac Logistics, LLC (the Employer) waived an untimely challenge to the Board members’ recess appointments and enforced the Board’s finding that the employer’s confidentiality policy stymied employee discussions of wages in violation of Section 8(a)(1) of the National Labor Relations Act (the Act). 
The Employer is a Fort Worth, Texas-based non-unionized trucking company, who required employees to sign a confidentiality policy that prohibited employees from sharing or copying “confidential information” that included “personnel information and documents” without prior management approval.  The policy further stated that disclosure of this information “could lead to termination, as well as other possible legal action.”  The Board found that the confidentiality policy was facially unlawful  because employees would reasonably interpret the ban on disclosing “personnel information and documents” to prohibit discussing their salaries and wages with coworkers or non-employees. 
On appeal to the Fifth Circuit, the Court enforced the Board’s order.  As an initial matter, the Court held that the Employer waived its argument that President Obama unconstitutionally appointed two members of the Board panel that decided the case.  The Court so decided because the Employer failed to make that challenge until its reply brief and had not first raised the issue to the Board pursuant to 29 U.S.C. § 160(e).   
As to the merits, the Court began by quoting its decision in NLRB v. Brookshire Grocery Co., 919 F.3d 359, 363 (1990):  “A ‘workplace rule that forb[ids] the discussion of confidential wage information between employees ... patently violate[s] section 8(a)(1).’”  Agreeing with the Board that employees would reasonably construe the confidentiality policy to prohibit discussion of wages, the Court observed that “[t]he confidentiality clause’s express terms prevent discussion of personnel information outside the company, and [the employer] presents no evidence that” employees ignored the clause’s explicit prohibition and discussed wages with non-employees.  The Court rejected the Employer’s claim that employees did not actually interpret the clause to prohibit wage discussions, noting that “the actual practice of employees is not determinative” to determining whether a policy facially violates the Act.   
The Court’s published decision is available here.