FlexFrac Logistics/Silver Eagle Logistics

National Labor Relations Board - Administrative Judge Opinions

Feb 6, 2012

16-CA-027978 (N.L.R.B. Feb. 6, 2012)

JD(ATL)–6–12
Fort Worth, TX
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
ATLANTA BRANCH OFFICE
FLEX FRAC LOGISTICS LLC, AND
SILVER EAGLE LOGISTICS, LLC,
JOINT EMPLOYERS
Respondents
and CASE 16–CA–27978
KATHY LOPEZ
an Individual
Erica Berencsi, Esq., for the General Counsel.
Scott Hayes, Esq., of Dallas, TX, for the
Respondents.
DECISION
STATEMENT OF THE CASE
MARGARET G. BRAKEBUSCH, Administrative Law Judge. This case was tried in
Fort Worth, Texas, on October 13, 2011. Kathy Lopez (Lopez) filed the charge on April 15,
2011 and amended the charge on May 4, 20111 and the Acting General Counsel issued the
complaint on July 27, 2011.
The complaint alleges that since May 10, 2010, Flex Frac Logistics LLC and Silver
Eagle Logistics, LLC (Respondents) have maintained a written rule prohibiting employees’
disclosure of confidential information. The complaint further alleges that on or about
December 30, 2010, Respondents promulgated, and thereafter maintained a rule prohibiting
employees from discussing employee wages. The complaint alleges when the Respondents
terminated Lopez on or about December 30, 2010, because she violated these rules,
Respondents unlawfully interfered with, restrained, and coerced Lopez in the exercise of
rights protected by Section 7 of the National Labor Relations Act (the Act.)

1 All dates are in 2010 unless otherwise indicated.
JD(ATL)–6–12
2
On the entire record, including my observation of the demeanor of the witnesses, and
after considering the briefs filed by the Acting General Counsel and Respondent, I make the
following
FINDINGS OF FACT5
I. JURISDICTION
Respondents, as joint employers with an office and place of business in Fort Worth,
Texas, have been engaged in interstate transportation of freight. During the 12-month period 10
of time ending June 30, 2011, Respondents, in conducting their business operation, derived
gross revenues in excess of $50,000 for the transportation of freight from the State of Texas
directly to points outside the State of Texas. During the same time period, Respondents, in
conducting their business, performed services valued in excess of $50,000 in states other than
the State of Texas. Respondents admit and I find that the Respondents are employers within 15
the meaning of Section 2(2), (6), and (7) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. Issues20
Counsel for the Acting General Counsel submits that the Respondent2 maintains a
confidentiality rule that violates Section 8(a)(1) of the Act on its face because employees
would reasonably interpret it as prohibiting their discussion of wages. Furthermore, counsel
argues that the Respondent terminated employee Kathy Lopez (Lopez) pursuant to the rule 25
when she discussed wages. The Respondent argues, however, that the confidentiality rule
neither refers to wages nor prohibits the discussion of wages by employees. Counsel for the
Respondent submits that the provision prohibits the disclosure of the Respondent’s
confidential information outside the organization and to third parties. The Respondent further
submits that it terminated Lopez because it believed that she was discussing its confidential 30
information and specifically the terms of its contracts with customers to individuals outside
the organization and because Lopez was disruptive within the workplace.
B. Background
35
William Funk (Funk) began Silver Eagle Logistics in 2006. In February 2010, Silver
Eagle Logistics merged with another company to create Flex Frac Logistics. As referenced
above, and for purposes of this proceeding, Silver Eagle Logistics and Flex Frac Logistics
function as a joint employer and are jointly identified as the Respondent. As president of
Silver Eagle Logistics, William Funk (Funk) oversees the entire operation of these joint 40
employers. Funk also shares ownership of the operation with Jeff Blackwood, Virginia
Moore, and Marty Moore. John Wilkinson (Wilkinson) is Respondent’s chief financial officer

2 Silver Eagle Logistics and Flex Frac Logistics admit that they are a joint employer for
purposes of this proceeding. Accordingly, they are referenced jointly as the Respondent.
JD(ATL)–6–12
3
(CFO) and Rick Forepaugh (Forepaugh) is Respondent’s general manager. In November
2010, Susie Kellum assumed the position of office manager and assistant controller. Prior to
that time, the position was held by Patricia Villerreal. Kellum reports to Wilkinson and
manages employees in the office.
5
Lopez worked in accounts payable from May 2010 until her termination in December
2010. Her job required that she obtain haul tickets from the drivers, input their data, and
prepare the drivers’ pay at the end of each week. Lopez’ sister; Rebecca Williams also
worked in accounts payable. Additionally, Lopez’ husband worked as a driver, her cousin
worked in dispatch, and her two nephews worked as pushers. 10
C. Respondent’s Operation
Respondent’s business operation involves the delivery of frac sand to oil and gas well
sites. In conducting its operation, Respondent employs approximately 250 employees; 15
approximately 100 of which are company drivers. In addition to the company drivers,
Respondent also contracts with approximately 100 nonemployee drivers to deliver their
product. These contract drivers are referenced in the record as vendors, leased drivers, or
independent contractors.
20
After submitting a bid to its customer, Respondent then contracts with the customer to
haul loads of frac3 sand for a specific rate. In submitting the bid, Respondent considers the
costs for the ground crew, the costs for the load-out crew, and the costs incurred in using the
company driver or the leased driver. Respondent’s contract with the leased driver provides
that the driver will be paid a specific mileage rate for the line haul to Respondent’s customer. 25
In addition to the line haul rate, the vendors may also receive additional pay for their “waiting
time” or for “deadhead” miles. The total amount paid using this rate may also be reduced if
the leased driver generates additional charges such as the driver’s use of the Respondent’s
DOT (U.S. Department of Transportation) authority or if the leased driver uses Respondent’s
insurance. Respondent asserts that the contract rates with its various customers are 30
confidential and are not disclosed to the lease drivers.
At the end of 2010, Respondent employed approximately 10 employees in its
accounting department. The accounting department is supervised by CFO Wilkinson and
Controller/Office Manager Keller. The accounting employees prepare the invoices for the 35
customers as well as process the pay for the company drivers and the leased drivers.
D. The Confidentiality Agreement
In early May 2010, the following confidentiality rule was drafted by Controller 40
Patricia Villarreal. The rule was implemented and has remained in effect since that time. It is
undisputed that Respondent terminated employee Kathy Lopez pursuant to this rule:

3 Although the parties provided no specific definition of frac sand for the record, it appears to be
an additive or proponent used in the drilling process for oil and gas wells.
JD(ATL)–6–12
4
Employees deal with and have access to information that must stay within the
Organization. Confidential information includes, but is not limited to,
information that is related to: our customers, suppliers, distributors; Silver
Eagle Logistics, LLC organization management and marketing processes, 5
plans and ideas, processes and plans; our financial information, including
costs, prices; current and future business plans, our computer and software
systems and processes; personnel information and documents, and our logos,
and art work. No employee is permitted to share this Confidential Information
outside the organization, or to remove or make copies of any Silver Eagle10
Logistics LLC records, reports or documents in any form, without prior
management approval. Disclosure of Confidential Information could lead to
termination, as well as other possible legal action.
Wilkinson testified that the confidentiality agreement does not prohibit employees 15
from talking with other employees about wages. He also asserted that Respondent has no
written document or verbally implemented policy that prohibits employees from discussing
wages.
E. Respondent’s Evidence Concerning Lopez’s Discharge20
Funk testified that Lopez was terminated after he learned that Lopez was disclosing to
employee Frank Gay (Gay) and others the differential between what Respondent was
charging its customers and what Respondent was paying its contract drivers. Funk explained
that his concern had not been the fact that she disclosed the rates paid to the contract drivers 25
or the amount of pay given to the company drivers. He clarified that the amounts paid to
company drivers are often made public as a means of building morale and encouraging
drivers. Funk asserted that the line haul rates that are paid to the company drivers are public
knowledge. He also explained that the contract rates paid to the vendors are all the same. He
confirmed that his concern had been that Lopez had disclosed the contract rates paid to 30
Respondent by its customers or more specifically that she had disclosed Respondent’s profit
margin. Funk contends that Lopez was not terminated because she discussed wages.
Funk testified that after his managers informed him about Lopez talking with Gay, he
personally spoke with Gay during the month of November 2010. Funk testified that during 35
his conversation with Gay, he learned that Lopez had offered to show him documents that
would show the difference between what Respondent was charging its customers versus what
Respondent was contracting to pay its drivers. Funk recalled that after speaking with Gay, he
asked Wilkinson and Forepaugh to do additional investigation while Funk was away from the
facility on a 3-week business trip. Wilkinson testified that when he spoke with Gay, Gay told 40
him that in a conversation with Lopez, she explained to him how customers were billed.
Funk also recalled that in addition to his conversation with Gay, he received phone
calls from three vendor contractors who gave him information that was similar to what Gay
had told him. The contractors told him that they knew what Respondent had charged the 45
JD(ATL)–6–12
5
customer for work they had done and they wanted more money to make those hauls. Funk
could recall the names of two of the contractors but could not recall the name of the third
contractor. He confirmed, however, that all three of the contractors stopped providing
services to Respondent after these conversations.
5
Funk explained that based on the investigation, he concluded that information about
Respondent’s contractual rates with its customers was “out on the streets.” He further
explained that this kind of disclosure of information not only affects the Respondent’s
dealings with its contractors, but it also gives his competitors a “leg up.” If his competitors
know what he is charging his customers, they can adjust their bids accordingly. 10
Funk confirmed that after the investigation, Wilkinson, Forepaugh, and he jointly
made the decision to terminate Lopez. Funk asked Kellum to join the conversation when
Lopez’ termination was discussed. Wilkinson also testified that Lopez was removed from the
accounting department because of her disclosure of confidential information. After his 15
speaking with both Gay and Funk, Wilkinson also decided that Lopez should be fired.
F. Employee Testimony Concerning Lopez’ Actions
Although Gay appeared at the hearing pursuant to the Acting General Counsel’s 20
subpoena, he did so without meeting or speaking with the Board attorney to prepare for
hearing. At the end of October 2010, or the beginning of November 2010, Gay changed from
his job as a truckdriver to a job in dispatch. Gay testified that shortly after he took the job in
dispatch, he had a conversation with Lopez. Lopez began the conversation by asking Gay
what he had made during November as a truckdriver. He told Lopez that as a company driver 25
he was paid 25 percent of what Respondent made for the truck’s delivery. Lopez told him
that he was being “screwed over” by Respondent because Respondent was not paying him the
correct amount. She told him that he had received 25 percent of $700 and he should have
received 25 percent of $1100. Lopez further explained that because she worked in accounting
and billed Respondent’s customers, she could show him where he was being cheated out of 30
the percentage for the $1100. Gay testified that he had a “couple” more conversations with
Lopez in which she provided similar information. Gay recalled that in one of the
conversations with Lopez, she had documents in her hand and wanted to show him what a
specific customer actually paid Respondent. Gay recalled that Shift Supervisor Ben Gatzke
was present during his first conversation with Gay and that Lopez’ sister; Rebecca Williams 35
was sometimes present during the other conversations with Lopez.
Gay testified that anyone working around Lopez at the time would have heard her
comments. Gay recalled that after his first conversation with Lopez, he did all that he could
to avoid her because in his opinion “she just spewed a lot of venom through the whole 40
dispatch.” He explained that because her comments seemed to have a negative effect on the
people working in dispatch, he and Gatzke asked Dispatch Supervisor Jamie Stingley to keep
Lopez out of the dispatch area. Gay acknowledged that when he spoke with Stingley, he told
Stingley that he wanted Lopez out of dispatch because she was talking about wages and rates
of drivers and because she was a negative person. He told Stingley that if she told the wrong 45
JD(ATL)–6–12
6
person that they were being screwed by the company, they might not take it so lightly. His
conversation with Stingley occurred on or about Thanksgiving. In addition to speaking with
Stingley, Gay also spoke with Wilkinson and Kellum about his conversations with Lopez.
Although he could not recall having a specific conversation with Funk, he did not dispute that
he did so. He recalled telling Wilkinson that Lopez came into dispatch “spewing a lot of 5
venom and badmouthing the company. “As an example of the badmouthing, he told
Wilkinson that Lopez had informed him that Respondent was not paying the company drivers
their percentage of the total amount that Respondent made from the truck delivery.
Lopez testified that if there was some dispute concerning a drivers’ haul ticket, she 10
went to dispatch in order to determine the problem. She recalled that while she normally
spoke with the dispatch supervisor, she also spoke with other employees in dispatch. She
recalled having a conversation with Frank Gay when she went to the dispatch office in early
November. Lopez testified that Gay was ending a telephone call with a driver when she
entered the office. She asserted that Gay turned to speak to another employee in dispatch and 15
made the statement: “I don’t understand why these drivers are complaining about pay,
because they all get paid 25 percent of whatever the company makes, so I don’t understand.”
Lopez testified that she told Gay that he was wrong because even though the company pays
its drivers 25 percent, there was no way to know what the vendors paid their individual
drivers. Lopez contended that she only had the one conversation with Gay. She denied that 20
she offered to show him what the company was being paid by its customers and she denied
taking any document with her to dispatch to show Gay what Respondent’s customers were
paying.
Catherine Lee Chambers (Chambers) began working for Respondent in September 25
2010 and worked in dispatch until February 2011 when she transferred to the accounting
department. Chambers testified that in November 2010 she had a conversation with Lopez in
the dispatch office. Chambers did not recall if anyone else was present or within earshot of
the conversation. Chambers began the conversation by asking Lopez what employees were
paid in accounting. Chambers recalled that although Lopez did not refuse to tell her what 30
employees were paid in accounting, Lopez did not answer the question.
Lopez recalled that her conversation with Chambers occurred on the same day that she
spoke with Gay about the pay for company drivers and contract drivers. Lopez recalled that
Chambers told her that she wanted to get a position in accounts payable and she asked what 35
the employees made in that position. Lopez told her that while she couldn’t tell her what
employees made, the starting salary was $14 an hour. Chambers testified that she did not
recall having told anyone about her conversation with Lopez. She contended that the first
time that she ever told Kellum about this conversation with Lopez was the day of her
testimony in the instant hearing. Chambers denied that she had ever spoken with Funk, 40
Wilkinson, or Kellum about her testimony prior to giving an affidavit to the Board during the
investigation. Chambers also recalled observing Lopez as disruptive.
JD(ATL)–6–12
7
G. Lopez’s Testimony Concerning the Confidentiality Rule
When Lopez began working for Respondent in May 2010, her supervisor, Trish
Villarreal, asked her to sign the document containing the confidentiality agreement. The
document also contains a provision relating to employment-at-will as well as a provision 5
detailing the circumstances that would constitute a basis for termination. Lopez testified that
when Villarreal gave her the document to sign, Villarreal told her that it was an employment-
at-will document and that everyone had to sign it. Lopez testified that Villarreal said that the
reason for the document was to prevent employees from talking about the cost and the price
that the company was receiving from the customers. She also added, “and wages and things 10
like that.”
III. ANALYSIS AND CONCLUSIONS
A. The Confidentiality Rule15
1. The parties’ positions
Citing the Board’s decision in Lafayette Park Hotel, 326 NLRB 824, 825 (1998), enfd.
203 F.3d 52 (D.C. Cir. 1999), counsel for the Acting General Counsel asserts that an 20
employer violates Section 8(a)(1) of the Act when it maintains a work rule that reasonably
tends to chill employees in the exercise of their Section 7 rights. Counsel argues that the
confidentiality rule in issue prohibits Section 7 activity, including a discussion of wages.
Respondent maintains that the confidentiality provision in no way precludes employees from
conferring with respect to matters directly pertaining to the employees’ terms and conditions 25
of employment. Furthermore, Respondent argues that the provision cannot reasonably be
read as a rule prohibiting discussions of wages or working conditions of employees.
2. Prevailing Legal Authority
30
In its 1982 decision in International Business Machines Corp., 265 NLRB 638 (1982),
the Board explained that the discussion of wages is an important part of organizational
activity and that the suppression of that information adversely affects employee rights and
will be held violative of the Act unless the employer can establish substantial and legitimate
business justification for its policy. Thus, it is well established that employees have a 35
protected right to discuss and to distribute information regarding wages, hours, and other
terms and conditions of employment. Mobile Exploration & Producing U.S., Inc., 323 NLRB
1064, 1068 (1997), enfd. 156 F.3d 182 (5th Cir. 1998). As the Board later pointed out in
Double Eagle Hotel & Casino, 341 NLRB 112, 115 fn. 14 (2004), the ability to discuss terms
and conditions of employment with fellow employees is the most basic of Section 7 rights. 40
Citing previous decisions4 in this regard, the Board recently reiterated in Parexel

4 Aroostook County Regional Ophthalmology Center, 317 NLRB 218, 220 (1995), enfd. in part
81 F.3d 209 (D.C. Cir. 1996); Whittaker Corp., 289 NLRB 933, 933-934 (1988).
JD(ATL)–6–12
8
International, 356 NLRB No. 82, slip op. at 3 (2011), that “wage discussions among
employees are considered to be at the core of Section 7 rights.”
Thus, because of the inherent protection for employees in discussing wages and other
terms and conditions of employment, the Board has scrutinized employer confidentiality 5
agreements or rules that may restrict such Section 7 rights. In Scientific-Atlanta, Inc., 278
NLRB 622, 626 (1986), the Board found that an employer’s confidentiality rule barring the
disclosure of employee promotions and raises was unlawful whereas in K-Mart, 330 NLRB
263 (1999), the Board found that an employer’s rule prohibiting disclosure of company
business documents was lawful. Additionally, in Mediaone of Greater Florida, Inc., 340 10
NLRB 277 (2003), the employer’s prohibition from disclosing the employer’s proprietary
private business information was not found to be unlawful.
In order to determine whether an existing confidentiality rule is unlawful, the Board
has set out a framework for evaluating employer confidentiality rules. The rule must first be 15
examined to determine whether it explicitly restricts Section 7 activity. If it does not, the
circumstances must be evaluated to determine whether: (1) employees would reasonably
construe the language of the rule to prohibit Section 7 activity; (2) the rule was promulgated
in response to Section 7 activity; or (3) the rule has been applied to restrict the exercise of
Section 7 rights. If any of these circumstances are shown to apply, the rule infringes on20
employee rights under the Act. Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004).
Thus, an employer’s confidentiality rule that is shown to infringe on Section 7 rights may be
found to be unlawful unless the employer articulates and establishes a legitimate and
substantial business justification for the rule that outweighs the infringement on employee
rights. See, e.g., Desert Palace Inc., 336 NLRB 271 (2001); and Phoenix Transit System, 337 25
NLRB 510 (2002).
3. The basis for Lopez’ termination
Before addressing the specific language of Respondent’s confidentiality agreement, it 30
is necessary to examine its enforcement with respect to the prohibition against wage
discussion. Although Respondent admits that Lopez was terminated pursuant to the
confidentiality agreement that she signed in May 2010, Respondent maintains that it
terminated her because she was disclosing Respondent’s contract rates with its customers;
information that Respondent considered to be confidential. I find that the total record 35
evidence supports Respondent’s assertion.
Funk credibly testified that based on information that he received, it was his
understanding that Lopez was telling employee Frank Gay and others the amount that
Respondent was charging its customers versus the amount that Respondent paid its drivers. 40
Funk also testified that there was no prohibition in employees talking about what they were
paid by Respondent. He testified without contradiction that Respondent often made drivers’
pay public in order to motivate the drivers in their work.
JD(ATL)–6–12
9
Gay testified that although truckdrivers did not know how much Respondent received
from their customers, it was not uncommon for them to discuss their own pay. Although Gay
opined that he did believe that he should disclose the various drivers’ pay when he worked in
dispatch, he did not identify any written rule that prohibited the disclosure. He did not
indicate why he believed this or whether anyone in management had specifically instructed 5
him in this regard. Chambers testified that she had never been told that she could not discuss
wages with other employees and that she had heard other employees discussing wages at the
facility.
The only employee who testified concerning any restriction in discussing wages was 10
Lopez. She testified that when Villarreal first gave her the agreement to sign in May 2010,
Villarreal told her that the reason for the document was to keep employees from talking about
the costs and the price that Respondent was receiving from its customers. Lopez then added,
“and wages and things like that.” She testified that when she was terminated, Wilkinson told
her that she was terminated because she discussed wages and talked about drivers’ pay. I 15
don’t find Lopez’ testimony to be credible. Aside from the fact that Lopez’ alleged accounts
of these conversations are self-serving, her description of these conversations conflicts with
her other testimony. Lopez contends that she spoke with Gay about drivers’ pay and that she
also spoke with Chambers about the pay for accounting employees. Had Villarreal actually
warned Lopez that she was prohibited from discussing wages under the confidentiality 20
agreement, it is unlikely that she would have freely engaged in such conversations with either
Gay or Chambers. Additionally, Lopez testified that perhaps as early as August 2010, she
was involved in a discussion with owner Virginia Moore, Supervisor Villarreal, and three
other employees. During the conversation, Lopez and the other employees were questioning
why the contract drivers were getting raises and the company drivers were not. Lopez 25
recalled that she and the other employees stated that they thought that it was unfair for the
company drivers to receive one rate and the contract drivers another rate. Moore responded to
the employees’ comments by simply stating that Respondent was not going to change the
rates as suggested by Lopez and the other employees. Lopez admitted that neither Moore nor
anyone else told her that the wage information that she was discussing was confidential. 30
There is no evidence that any action was taken against Lopez or any of the other employees
who participated in the conversation for their having openly discussed the wages of the
truckdrivers. Thus, I do not credit Lopez’ testimony that she was told that she was terminated
for discussing employees’ wages or that she was ever told that the confidentiality agreement
prohibited the discussion of wages. 35
Furthermore, I do not credit Lopez’ testimony concerning her conversation with Gay.
She denied that she offered to show Gay records of what Respondent received from its
customers. Her version of the conversation was in total contrast with Gay’s testimony. I
found Gay’s testimony to be straightforward and unembellished. There was nothing in the 40
record to indicate that he fabricated or exaggerated his testimony or that he would have had a
reason to do so. The total record evidence supports a finding that during her conversations
with Gay, Lopez disclosed information about Respondents’ contracts with its customers and
that Gay shared this disclosure with Funk and the other managers.
45
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10
The only other evidence that would otherwise support a finding that Lopez was
terminated for discussing employee wages is the language that Kellum included in Lopez’
termination notice. When Kellum prepared the termination notice, she included the following
language:
5
Kathy told one of our dispatch employees that we paid our drivers one rate and
our customers another. She also discussed what people make in the accounting
office to other employees that are or were looking for raises.
Kellum testified that she had only been employed with Respondent for 4 days when she first 10
spoke with Funk about his terminating Lopez. Funk told here that he wanted Lopez “gone
now.” She recalled that Funk’s concern was that Lopez was discussing Respondent’s
contracts with its customers. Although he wanted to terminate Lopez, he was also leaving for
a business trip and he wanted management to get additional information before Lopez was
terminated. Kellum recalled that in a later conversation, Funk told her that he would wait to 15
fire Lopez after the holidays as he didn’t want to terminate her before Christmas.
Kellum testified that although she included the reference to Lopez’ accounting
department wage discussions in the termination notice, Funk had spoken with her only about
terminating Lopez for her discussions concerning what the contractors are paid versus what 20
Respondent’s customers pay She testified that although she knew that it is important to write
the correct reason for an employee’s termination on the discipline notice, she had only
terminated one other employee in her career prior to Lopez. She testified that in her previous
jobs, the confidentiality agreements had always prohibited discussing internal company
matters. She explained that “in her mind,” this would also include wages. Because she knew 25
that Lopez had discussed wages in the accounting department and because she personally
didn’t think that wages should be discussed, she added both reasons to the termination notice.
She admitted, however, that Funk made the decision to terminate Lopez and he had never
expressed any concern about Lopez discussing wages with other employees.
30
The overall record reflects that Kellum did not make the decision to terminate Lopez.
It is obvious that in her zeal as a new manager to prepare a comprehensive termination notice,
she drafted what she thought would be a proper basis for a termination. It is apparent,
however, that she took such an action on her own initiative. Based on the entire record, it is
apparent that Respondent terminated Lopez because of her disclosure of confidential 35
information about the contract rates paid to Respondent by its customers and not because of
any discussions that Lopez may have had about accounting employees’ wages or for any other
discussions about wages.
4. The application of the confidentiality agreement40
Clearly any rule that prohibits employees from discussing their compensation has been
determined to be unlawful on its face. Danite Sign Co., 356 NLRB No. 124, slip op. at 1 fn. 1
and slip op. at 7 (20110; Freund Baking Co., 336 NLRB 847 (2001). In the instant case,
Respondent’s confidentiality rule includes a long list of information that is considered to be 45
JD(ATL)–6–12
11
confidential and prohibited from disclosure. The agreement provides that the disclosure of
such information could lead to termination as well as possible legal action. There is no
reference in the entire rule to wages, compensation, or any other specific terms and conditions
of employment. Included in this extensive listing of confidential information that is
prohibited from disclosure, however, are “personnel information and documents.” 5
In its 2008 decision in NLS Group, 352 NLRB 744, 745, the Board found that the
employer violated Section 8(a)(1) by terminating an employee pursuant to an overly broad
confidentiality rule. Following its earlier decision in Lutheran Heritage Village-Livonia, 343
NLRB 646 (2004), the Board in NLS reiterated that even if a rule does not explicitly restrict 10
Section 7 rights, the rule is nonetheless unlawful if employees would reasonably construe the
language of the rule to prohibit Section 7 activity. Thus, the central question appears to be
whether employees would read a confidentiality rule as prohibiting protected employee
communications about terms and conditions of employment or whether employees would
recognize “the legitimate business reasons” for which such a rule is promulgated and would 15
not believe that it reaches Section 7 activity. LaFayette Park Hotel, 326 NLRB 824, 827
(1998), enfd. 203 F.3d 52 (D.C. Cir. 1999).
In its 2001 decision in IRIS U.S.A., 336 NLRB 1013 (2001), the Board dealt with
confidentiality language that was similar to that found in the instant case. Specifically, in 20
IRIS, the employer prohibited disclosure of confidential information to include financial
information, leases, licenses, agreements, sales figures, business plans, and proprietary
information. As with the confidentiality language in the instant case, it was apparent that the
employer sought to prevent the disclosure of information that might give unfair advantage to
competitors or adversely affect its ability to compete in its industry. The employer, however, 25
went on to include “personnel records” as confidential and limited their disclosure only to the
named employee and senior management. In determining whether the employer’s
confidentiality rule was lawful, the judge noted that “personnel records” contain various kinds
of information about employees; including their wages. The Board adopted the judge’s
findings and found that the employer violated Section 8(a)(1) by maintaining the 30
confidentiality provision. Id. at 1014 fn. 1.
Certainly the Board has cautioned that a rule should be given a “reasonable reading”
and that particular phrases in a rule should not be read in isolation or presumed to have
improper interference with Section 7 rights. Guardsmark, LLC, 344 NLRB 809, 809 (2005). 35
Counsel for the Acting General Counsel submits, however, that because Respondent’s
ambiguous rule prohibits the dissemination of “personnel information and documents” and
because Respondent does not clarify the term, Respondent’s rule reasonably tends to chill
protected activity. The Acting General Counsel’s argument has merit.
40
Although I have no doubt that the confidentiality agreement was likely written to
prohibit confidential disclosures other than wages or other terms and conditions of
employment, Respondent did not limit the prohibition to only those confidential matters that
did not involve wages and other terms and conditions of employment. In Hyundai America
Shipping Agency, Inc., 357 NLRB No. 80 (2011), the Board affirmed Judge Gregory 45
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Meyerson in finding that the respondent violated Section 8(a)(1) by maintaining or enforcing
rules in the employee handbook that prohibited employees from disclosing information or
messages from emails, instant messaging, and phone systems to unauthorized persons. As
Judge Meyerson aptly pointed out “employees should not have to decide at their own peril
what information is not lawfully subject to such a prohibition.” This same analysis may be 5
applied to Respondent’s confidentiality agreement. By including the wording “personnel
information and documents” in the listing of confidential documents, Respondent leaves to
employees the task of determining what entails “personnel information and documents” and
requires them to speculate as to what kind of information disclosure may trigger their
discharge. Accordingly, I find that the confidentiality agreement that Respondent 10
implemented in May 2010, and which has been maintained since that time, is overly broad
and has language that employees may reasonably construe as restricting the exercise of their
Section 7 rights.
Although I have not found that Respondent terminated Lopez because she discussed 15
wages with other employees, her termination is nevertheless unlawful. It is axiomatic that a
rule may be unlawful even if it is not enforced. Radisson Plaza Minneapolis, 307 NLRB 94,
94 (1992); Waco, Inc., 273 NLRB 746 (1984). In the instant case, Lopez was terminated
pursuant to the existing confidentiality agreement even though she was not terminated for
discussing wages or other protected activity. Under extant Board precedent, an employer’s 20
imposition of discipline pursuant to an unlawfully overbroad policy or rule further constitutes
a violation of the Act. NLS, 352 NLRB 744, 745 (2008); Double Eagle Hotel & Casino, 341
NLRB 112, fn. 3 (2004), enfd. 414 F.3d 1249 (10th Cir. 2005), cert. denied 546 U.S. 1170
(2006). Thus, despite the fact that the rule may not have been enforced because Lopez
discussed wages with other employees, the rule is nonetheless unlawful and Lopez’s 25
discharge is violative of Section 8(a)(1) of the Act.
CONCLUSIONS OF LAW
1. Respondents Flex Frac Logistics LLC and Silver Eagle Logistics, LLC are 30
joint employers engaged in commerce within the meaning of Section 2(6) and (7) of the Act.
2. By the following acts and conduct the Respondents violated Section 8(a)(1) of
the Act.
35
(a) By promulgating and maintaining an overly broad confidentiality rule
that employees could reasonably understand to prohibit them from discussing their wages and
other terms and conditions of employment.
(b) By discharging Kathy Lopez pursuant to an overly broad 40
confidentiality rule.
3. I do not find that Respondent violated the Act in any other manner.
JD(ATL)–6–12
13
REMEDY
Having found that the Respondent has engaged in certain unfair labor practices, I find
that the Respondent must be ordered to cease and desist and to take certain affirmative action
designed to effectuate the policies of the Act. The Respondent, having unlawfully terminated 5
the employment of Kathy Lopez, I shall order Respondent to offer Kathy Lopez immediate
and full reinstatement and make her whole for any loss of earnings5 and other benefits,
computed on a quarterly basis from the date of her discharge to the date of proper offer of
reinstatement, less any net interim earnings, as prescribed in F. W. Woolworth Co., 90 NLRB
289 (1950), plus interest as computed in New Horizons for the Retarded, 283 NLRB 1173 10
(1987), compounded daily as prescribed in Kentucky River Medical Center, 356 NLRB No. 8
(2010), enf. denied on other grounds sub.nom., Jackson Hospital Corp. v. NLRB, 647 F.3d
1137 (D.C. Cir. 2011).
On these findings of fact and conclusions of law and on the entire record, I issue the 15
following recommended6
ORDER
The Respondents, Flex Frac Logistics LLC and Silver Eagle Logistics LLC as joint 20
employers, their officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Promulgating and maintaining an overly broad and ambiguous 25
confidentiality rule that prohibits or may reasonably be read to prohibit employees from
discussing wages or other terms and conditions of employment with other employees.
(b) Discharging or otherwise disciplining employees pursuant to an overly
broad confidentiality rule that prohibits or may reasonably be read to prohibit employees from 30
discussing wages or other terms and conditions of employment.

5 In the complaint, the Acting General Counsel seeks an order requiring reimbursement of
amounts equal to the difference in taxes owed upon receipt of a lump-sum payment and taxes
that would have been owed had there been no discrimination. The Acting General Counsel
also requests that the Respondent be required to submit the appropriate documentation to the
Social Security Administration so that when backpay is paid, it will be allocated to the
appropriate periods. Consistent with the Board’s recent rulings in this regard, the Acting
General Counsel’s request is denied. See Rogan Brothers Sanitation, Inc., 357 NLRB No. 137,
slip op. at 8, fn. 4 (2011); Consumer Product Services, 357 NLRB No. 87, slip op. at 4, fn. 3
(2011).
6 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations,
the findings, conclusions, and recommended Order shall, as provided in Sec. 102.48 of the
Rules, be adopted by the Board and all objections to them shall be deemed waived for all
purposes.
JD(ATL)–6–12
14
(c) In any like or related manner interfering with, restraining, or coercing
employees in the exercise of the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to effectuate the policies of the
Act. 5
(a) Rescind or revise the existing overly broad confidentiality rule to
remove any language that prohibits or may be read to prohibit employees from discussing
wages, hours, and other terms and conditions of employment.
10
(b) Notify all employees in writing that the overly broad confidentiality
rule that was promulgated in May 10, 2010, has been rescinded or modified and that
Respondent will not prohibit employees from discussing their wages or other terms and
conditions of employment.
15
(c) Offer Kathy Lopez full reinstatement to her former position, or if that
position no longer exists, to a substantially equivalent position, without prejudice to her
seniority or to any other rights and privileges previously enjoyed.
(d) Make Kathy Lopez whole for any loss of earnings and other benefits 20
suffered as a result of the discrimination against her, in the manner set forth in the remedy
section of this decision.
(e) Within 14 days of the date of this Order, remove from all files any
reference to the unlawful discharge, and within 3 days thereafter, notify Kathy Lopez in 25
writing that this has been done and that the discharge will not be used against her in any way.
(f) Preserve and, within 14 days of a request, or such additional time as the
Region Director may allow for good cause shown, provide at a reasonable place designated by
the Board or its agents, all payroll records, social security payment records, timecards, 30
personnel records and reports, and all other records, including an electronic copy of such
records if stored in electronic form, necessary to analyze the amount of backpay due under the
terms of this Order.
(g) Within 14 days after service by the Region, post at its facility in Fort 35
Worth, Texas, copies of the attached notice marked “Appendix7.” Copies of the notice, on
forms provided by the Regional Director for Region 16 after being signed by the
Respondent’s authorized representative, shall be posted by the Respondent and maintained for
60 consecutive days in conspicuous places including all places where notices to employees
are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the 40

7 If this Order is enforced by a judgment of a United States court of appeals, the words in the
notice reading “Posted by Order of the National Labor Relations Board” shall read “Posted
Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
JD(ATL)–6–12
15
notices are not altered, defaced, or covered by any other material. In the event that, during the
pendency of these proceedings, the Respondent has gone out of business or closed the facility
involved in these proceedings, the Respondent shall duplicate and mail, at its own expenses, a
copy of the notice to all current employees and former employees employed by the
Respondent at any time since May 10, 2010.5
(h) Within 21 days after service by the Region, file with the Regional
Director a sworn certificate of a responsible official on a form provided by the Region
attesting to the steps that the Respondent has taken to comply.
10
Dated: Washington, D.C. February 6, 2012
Margaret G. Brakebusch
Administrative Law Judge15
APPENDIX
NOTICE TO EMPLOYEES
Posted by Order of the
National Labor Relations Board
An Agency of the United States Government
The National Labor Relations Board has found that we violated Federal labor law and has
ordered us to post and obey this Notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities.
WE WILL NOT maintain an overly broad confidentiality rule prohibiting you from
discussing your wages or other terms and conditions of employment.
WE WILL NOT discharge or discipline you for discussing wages or other terms and
conditions of employment.
WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of the rights guaranteed you by Section 7 of the Act.
WE WILL notify you in writing that the overly broad confidentiality rule that was
implemented in May 2010 is rescinded or modified and will not be enforced to prohibit you
from discussing wages or other terms and conditions of employment with other employees in
a manner protected by the Act.
WE WILL within 14 days from the date of the Board’s Order, offer Kathy Lopez full
reinstatement to her former job or, if that job no longer exists, to a substantially equivalent
position, without prejudice to her seniority or any other rights or privileges previously
enjoyed.
WE WILL make Katy Lopez whole for any loss of earnings and another benefits suffered as
a result of her unlawful discharge, less any net interim earnings, plus interest.
WE WILL, within 14 days from the date of the Board’s Order, remove from our files any
reference to the unlawful discharge of Kathy Lopez, and WE WILL, within 3 days thereafter,
notify her in writing that this has been done and that the discharge will not be used against her
in any way.
FLEX FRAC LOGISTICS LLC
AND SILVER EAGLE LOGISTICS LLC
(Joint Employers)
Dated____________________By____________________________________________
(Representative) (Title)
The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the National Labor Relations
Act. It conducts secret-ballot elections to determine whether employees want union representation and it investigates and
remedies unfair labor practices by employers and unions. To find out more about your rights under the Act, and how to file a
charge or election petition, you may speak confidentially to any agent with the Board’s Regional Office set forth below. You may
also obtain information from the Board’s website: www.nlrb.gov.
819 Taylor Street, Room 8A24, Fort Worth, TX 76102
(817) 978-2921 Hours: 9:00 to 5:30 p.m.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND
MUST NOT BE ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS
CONCERNING THIS NOTICE OR COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE
REGIONAL OFFICE’S COMPLIANCE OFFER, (817) 978-2921.