Macy’s rules barring use of confidential customer information were lawful
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Thursday, August 17, 2017

Macy’s rules barring use of confidential customer information were lawful

By Ronald Miller, J.D.

Although employees generally have a right to appeal to an employer’s customers for support in a labor dispute, Macy’s rules prohibiting disclosure of information about customers obtained from the employer’s confidential records did not violate Section 8(a)(1) of the NLRA. The rules restricted the use or disclosure of social security numbers and credit card numbers and prohibited the use of customers’ contact information obtained from the employer’s own confidential records. Employees would not reasonably construe these rules to prohibit Section 7 activity, ruled a divided three-member panel of the NLRB. Member Pearce dissented (Macy’s Inc., August 14, 2017).

Restrictions on use of customer information. Macy’s had work rules governing the use of confidential information and personal data. An administrative law judge determined that the rules violated Section 8(a)(1) insofar as they restricted the use of information regarding customers. He reasoned that employees have a Section 7 right to communicate with customers regarding matters affecting their employment and found that the rules were unlawful because they restricted such communications. Contrary to the law judge, the Board concluded that the disputed rules did not interfere with the employees’ right to appeal to Macy’s customers for support in a labor dispute insofar as they restricted the use or disclosure of social security numbers and credit card numbers, or to the extent that they restricted the use of customers’ contact information obtained from Macy’s own confidential records.

Interpretation of rule. In determining whether a work rule violates Section 8(a)(1), the appropriate inquiry is whether the rule would reasonably tend to chill employees in the exercise of their Section 7 rights. If the rule does not explicitly restrict Section 7 rights, a violation is dependent upon a showing of one of the following: (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights. In this case, there was no allegation that Macy’s rules explicitly restricted Section 7 rights, were promulgated in response to union activity, or have been applied to restrict the exercise of Section 7 rights, so the question was whether employees would reasonably understand the rules to restrict Section 7 activity.

The Board pointed out that the “Confidential Information” rule specifically defined the confidential information to which it applied. The only information covered by the rule that arguably related to customers was “social security numbers or credit card numbers.” The General Counsel conceded that customers’ social security numbers and credit card numbers are “sensitive” information, and employees had no right to use such information for Section 7 purposes. Thus, to the extent Macy’s rules prohibited the unauthorized use or disclosure of customers’ social security numbers or credit card numbers, they were lawful.

Use of customer information. Similarly, the “Use and Protection of Personal Data” and “Confidentiality and Acceptable Use of Company Systems” rules were lawful to the extent they prohibited the use or disclosure of social security numbers or account numbers. Although those rules also limited the use or disclosure of customer names and contact information, which employees can use for the purpose of appealing to customers regarding a labor dispute or their terms and conditions of employment, the Board concluded that both rules, by their terms, only applied to customer names and contact information obtained from Macy’s own confidential records. The Act does not protect employees who divulge information that their employer lawfully may conceal, observed the Board. Thus, the rules were lawful.

Dissent. Member Pearce argued that the majority interpreted the rules at issue more narrowly than they were written. He agreed with the ALJ that employees would reasonably understand the rules to broadly prohibit the disclosure of general information about customers—information that could be used by employees in furtherance of their protected, concerted activities. The dissent argued that because the employees worked in retail or customer service, they would reasonably interpret these broad rules as prohibiting or restricting their disclosure and use of customer information for all purposes, including those that implicate their terms and conditions of employment. Pearce further pointed out that the rules made no distinction between information obtained from Macy’s confidential records, and customer names and contact information available to all employees and used in the course of their normal work duties.

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