For years we have been seeing more and more companies trying to force their employees into arbitration agreements – meaning they can’t file class action lawsuits against the company, and even if they’re successful in arbitration, the private nature of arbitration means they can’t let other employees (or potential employees) know about their claims or the outcome. Now Baylor University Medical Center is allegedly trying to stop employees from participating in lawsuits against the company, even after their employment has been terminated.
According to the National Labor Relations Board (NLRB), Baylor was allegedly trying to restrict an employee’s rights beyond her work for the company by including clauses in her contract that offered her $10,000 in exchange for refusing to participate in other claims brought against the company, unless required to do so by law. They also required her to keep confidential any information about Baylor that she may have acquired while working there, and to refrain from making any disparaging remarks about the company.
The law recognizes a need to balance the needs of a business to protect itself and its interests against the need to protect workers’ rights. That’s why confidentiality and non-disparagement clauses can be enforceable in employment contracts, but only if the company can prove that such clauses are necessary for protecting their legitimate business interests. According to an administrative law judge (ALJ), Baylor failed to put forth any legitimate business interests that would be endangered without the presence of their confidentiality and non-disparagement clauses in their employment contract. Continue reading