Steeltech Mfg.

213 315 NLRB No. 31 STEELTECH MFG. 1 In the absence of exceptions we adopt, pro forma, the hearing officer’s recommendations that Petitioner’s remaining Objections I(b), (e), II(f), III(i), and V(n), be overruled. 2 Petitioner’s Objection VI(r) alleged that ‘‘[o]n or about Novem- ber 9th, 1993, Steeltech made a unilateral change in terms and con- ditions of employment by implementing a Code of Ethics and Busi- ness Conduct Manual, which restricts employees’ conduct while at work and outside the plant. Also it furnishes [sic] violations if the rules are violated.’’ During the Regional Director’s investigation of this objection, the issue was narrowed to the impact and timing of Sec. 2.1 of the ethics manual entitled ‘‘Disclosure of Company In- formation.’’ 3 All dates are 1993. Steeltech Manufacturing, Inc. and United Electrical, Radio & Machine Workers of America (UE), Petitioner. Case 30–RC–5529 September 30, 1994 DECISION AND DIRECTION OF SECOND ELECTION BY MEMBERS DEVANEY, BROWNING, AND COHEN The National Labor Relations Board, by a three- member panel, has considered objections to an election held November 22, 1993, and the hearing officer’s re- port recommending disposition of them. Pursuant to a petition filed on October 25, 1993, the election was conducted pursuant to a Stipulated Election Agree- ment. The tally of ballots shows 41 for and 43 against the Petitioner, with 1 challenged ballot, an insufficient number to affect the results. The Board has reviewed the record in light of the exceptions and brief, adopts the hearing officer’s find- ings and recommendations to sustain the Petitioner’s Objection VI(r) for the reasons set forth below, and finds that the election must be set aside and a new election ordered.1 The Petitioner contends that the Employer’s Code of Ethics and Business Conduct Manual (ethics manual) prohibits employees from exercising their Section 7 right to discuss their wages and benefits and provides for discipline for violations of the prohibition.2 The Employer is a metal fabrication and painting services contractor and performs work almost exclu- sively as a subcontractor to U.S. Defense Department prime contractors. Executive Vice President Arthur Gregg testified that Defense Department contractors are held to strict standards of business conduct, and that he therefore decided that the Employer should de- velop and issue an ethics manual. Gregg assigned the task to Human Resources Assistant Louise Barlow in June 19933 but did not establish a timetable for its completion. Substantial drafting and redrafting of the manual had been accomplished when, in mid-September, Barlow learned she would be transferred effective November 1 to another position with the Employer. The petition for the election was filed on October 25. The ethics man- ual was completed and distributed to employees with their paychecks about November 9, at the height of the Union organizing drive. It contained the following pro- visions: Section 2.1 DISCLOSURE OF COMPANY IN- FORMATION STEELTECH’s trade secrets, financial, and cer- tain administrative information are valuable assets. Protection of this information is vital to our con- tinued growth and our ability to compete. Under laws, this type of information is treated as intel- lectual property, usually in the form of informa- tion, knowledge, or know-how, the possession of which gives the owner some advantage over com- petitors who do not possess it. To be protected under law, such information must not be generally or publicly known or must be patented or copy- righted if publicly disclosed. STEELTECH’s intel- lectual property assets are not always of a tech- nical nature. Typical of such nontechnical infor- mation are: STEELTECH business, new products or research plans. Operating or marketing plans. Program or product sales, profits, and/or pricing information Salary, wage and benefits data. [Emphasis added.] Employee, customer and vendor lists. Information regarding customer requirements, preferences or plans except where such informa- tion is publicly available. This list covers a wide scope of STEELTECH in- formation that must be safeguarded. Such infor- mation is usually marked with a notice that im- poses restrictions on the need to know within STEELTECH. However, most of what we know about our own jobs and the jobs of others, even without the classifications, should remain with STEELTECH. [Emphasis added.] If we leave the employ of STEELTECH, our legal obligation is to protect STEELTECH’s intellectual property until it becomes clear that it has become publicly avail- able, or that STEELTECH no longer considers it necessary to restrict its use. Correspondence, printed matter, documents or records of any kind, specific process knowledge, procedures, and spe- cial STEELTECH ways of doing things are all the property of and must remain within STEELTECH. Part 3 CONFLICTS OF INTEREST Section 3.1 GENERAL You have the responsibility and are expected to avoid any activity that may infer a conflict of in- 214 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 4 Kinder-Care Learning Centers, 299 NLRB 1171 (1990); Texas Instruments, 236 NLRB 68 (1976), enfd. in pertinent part 599 F.2d 1067 (1st Cir. 1979). See also Radisson Plaza Minneapolis, 307 NLRB 94 (1992), enfd. 987 F.2d 1376 (8th Cir. 1993); Waco, Inc., 273 NLRB 746 (1984). terest. Similarly, you may not use nor disclose confidential or proprietary information to any outside activity. [Emphasis added.] A conflict of interest exists if certain of your outside interests may adversely affect your motivation or perform- ance. The test criteria includes not only whether you ac- tually are improperly influenced, but whether the situation lends itself to improperly influencing you. A conflicting interest may unconsciously in- fluence you, and the mere existence of that inter- est may cause the propriety of your acts to be questioned. . . . . Section 3.5 RESPONSIBILITY OF EMPLOY- EES’ RELATIVES You should keep family members from doing anything that would be improper for you as an employee to do. In addition, it is a good general rule not to discuss STEELTECH business with anyone, including relatives, who are not STEELTECH employees. [Emphasis added.] Mem- bers of your immediate family should also be asked not to discuss STEELTECH business in the presence of others. Section 1.2.5 COMPLIANCE AND DISCIPLI- NARY ACTION . . . . Failure to comply with our standards will result in disciplinary action that may include reprimand; loss of compensation, seniority, or promotional opportunities; demotions; discharge; referral for criminal prosecution; or reimbursement to STEELTECH or the Government for any losses or damages resulting from the violation. As with all matters involving disciplinary action, principles of fairness will apply. Any employee charged with a violation will be afforded an opportunity to explain their actions before disciplinary action is taken. Disciplinary action may be taken against employ- ees who authorize or participate in actions which are a violation. Disciplinary action may be taken against any em- ployee who has deliberately failed to report a vio- lation. The Employer asserted a two-fold purpose for issuing the ethics manual. First, it wished to promul- gate enforceable standards of business integrity and honesty. It also wanted to protect salary information which, if disclosed, would give its competitors an un- fair advantage in bidding for government work. The hearing officer was not persuaded that the Em- ployer’s reasons for prohibiting disclosure of salary in- formation constituted sufficient business justification to outweigh the Section 7 rights of employees to discuss salary information with each other or with a union. She noted that the Employer produced no examples in which employees’ disclosure of their salary informa- tion imperiled the Employer’s bidding process. She also noted that the Employer failed affirmatively to in- form employees of their Section 7 right to discuss sal- ary information with each other or with a union, with- out fear of being disciplined for doing so. Thus, she found that employees reasonably could construe the above-cited provisions as a prohibition against sharing salary information with other employees or with a union. Noting also the closeness of the vote and the proximity of the publication of the new rules to the date of the election, the hearing officer found that the Employer’s issuance of the rules was objectionable conduct warranting the setting aside of the election. Although we do not agree with the hearing officer that the ethics manual prohibits employees from dis- cussing wages and benefits among themselves, we do agree with her that sections 2.1, 3.1, and 3.5 of the manual have a reasonable tendency to coerce or inter- fere with employees in the exercise of their right to discuss wages and benefits with a union.4 The rules in question expressly prohibit employees from disclosing wage information to, or discussing it with, persons not employed by Steeltech, a prohibition that clearly encompasses union representatives. Section 2.1 includes wages, salaries, and benefits within its definition of proprietary information and instructs em- ployees that ‘‘[s]alary, wage and benefits data . . . [are] STEELTECH information that must be safe- guarded . . . most of what we know about our own jobs and the jobs of other, even [if not classified] should remain with STEELTECH.’’ Section 3.1 warns employees that ‘‘you may not use nor disclose con- fidential or proprietary information to any outside ac- tivity.’’ Section 3.5 reiterates that ‘‘it is a good general rule not to discuss STEELTECH business with anyone, including relatives, who are not STEELTECH employ- ees.’’ Section 1.2.5 makes clear the consequence faced by an employee who disseminates wage information: [F]ailure to comply with our standards will result in disciplinary action that may include reprimand; loss of compensation, seniority, or promotional opportunities; demotions; discharge; referral for criminal prosecution; or reimbursement . . . for 215 STEELTECH MFG. 5 In fact, a shift of two voters would have changed the result. any losses or damages resulting from the viola- tion. [Emphasis added.] Thus, we find that, based on this language, employees reasonably could have felt constrained not to exercise their right to confer with a union about wages, salaries, and benefits. We need not rely solely on the provisions in the manual, however. We also find it significant that the Employer issued the ethics manual during the critical period, just 2 weeks before the election. The very tim- ing of the manual’s issuance created a heightened tend- ency that the rules would coerce or interfere with em- ployees in the exercise of their Section 7 right to dis- cuss their wages and benefits with the Union. We also note that the vote in the election was close. As the hearing officer pointed out, if only 3 voters in the unit of approximately 90 had read the cited sec- tions of the manual—and employees were likely to have done so because the manual was distributed with their paychecks—and believed that consulting with the Union about their wages and benefits would result in disciplinary action, the laboratory conditions for the election would have been affected.5 Under all these circumstances, we find that by issuing its ethics manual effectively prohibiting em- ployees from discussing their wages and benefits with the Union, the Employer engaged in objectionable con- duct. Accordingly, we sustain Petitioner’s Objection VI(r), set aside the election, and order that a new elec- tion be conducted. [Direction of Second Election omitted from publica- tion.]