The National Labor Relations Board (NLRB) has issued another decision striking down a private, non-union employment agreement.
The Quicken Loans, Inc. Decision
In this most recent case, Quicken Loans, Inc. (Case No. 28-CA-75857), the administrative law judge ruled that Quicken violated the National Labor Relations Act (the “Act”) by maintaining “overly broad and discriminatory rules” in its non-union mortgage banker employment agreements. Specifically, the judge ruled that two sections of the employment agreements unlawfully restricted employees’ Section 7 rights under the Act:
(1) The “Proprietary/Confidential Information” section, which defined as proprietary and confidential any “non-public information related to or regarding the Company’s personnel…including personal information of co-workers…such as home phone numbers, cell phone numbers, addresses, and email addresses.” This section was illegal because it could “reasonably tend to chill” an employee’s Section 7 rights by prohibiting that employee from discussing his or her wages, benefits, and/or working conditions with other employees.
(2) the “Non-Disparagement” section, which prohibited employees from publicly “criticizing, ridiculing, disparaging, or defaming Quicken or its products, services, policies, directors, officers, shareholders, or employees, with or through any written or oral communication or image.” This section was illegal because it also infringed on employees’ Section 7 rights. According to the judge, “employees are allowed to criticize their employer and its products” as part of their Section 7 rights, and “employees sometimes do so in appealing to the public, or to their fellow employees, in order to gain their support.”
As a result, the judge ordered Quicken to immediately cease and desist from using the “overly broad rules” and to notify all of its mortgage brokers that these sections of their employment agreements would be rescinded and not enforced.
It is important to note how this case came about. The decision arose out of an unfair labor practice complaint filed by a n0n-union Quicken mortgage broker, Lydia Garza. Ms. Garza had resigned her employment. Thereafter, Quicken wrote Ms. Garza a letter notifying her of her continuing obligations pursuant to her mortgage banker employment agreement. When Ms. Garza did not respond satisfactorily, Quicken then filed suit against Ms. Garza and five other former employees.
What Employers Should Do Now
Accordingly, California employers should review their employment agreements carefully to ensure that those agreements do not contain offending language similar to Quicken’s. If you find similarly broad language in your company’s agreements, you should revise that language to comport with the judge’s decision (and with the several recent NLRB decisions, which I discussed in this blog here). Also, consider adding specific examples to your policies, in plain and simple English, that make clear that your policies are not intending to interfere employees’ Section 7 rights. In addition, if you are contemplating disciplining, terminating, or suing a current or former employee for violating an employment agreement that contains similarly broad language, you should consult with your employment counsel and proceed with extreme caution.
