Super K-Mart

National Labor Relations Board - Board Decisions

Nov 30, 1999

330 N.L.R.B. 263 (N.L.R.B. 1999)

SUPER K-MART 263
K-Mart, d/b/a Super K-Mart and K-Mart and United
Food and Commercial Workers Union, Local
870, AFL–CIO, CLC. Cases 32–CA–15575, 32–
CA–15662–1, and 32–CA–15662–2
November 30, 1999
DECISION AND ORDER
BY MEMBERS LIEBMAN, HURTGEN, AND BRAME
On April 9, 1997, Administrative Law Judge Gerald A.
Wacknov issued the attached decision. The Respondent
filed exceptions and a supporting brief, the General
Counsel and the Union filed answering briefs, and the
Respondent filed a reply brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings, and conclusions only
to the extent consistent with this Decision and Order.
The judge found that the Respondent’s confidentiality
provision, which appears in its employee handbook, vio-
lates Section 8(a)(1) of the Act. We do not agree.
The Respondent’s confidentiality provision states:

Company business and documents are confidential.
Disclosure of such information is prohibited.

The judge found that the Respondent did not intend its con-
fidentiality provision to preclude or limit union organizing
activity or other protected concerted activity. He also found
uncontroverted the Respondent’s assertion that its confiden-
tiality provision was not enforced to prohibit employees
from discussing the terms and conditions of their employ-
ment with others. The judge, nevertheless, found that the
Respondent violated Section 8(a)(1) by promulgating the
confidentiality provision in its employee handbook. The
judge reasoned that employees could reasonably interpret
the language “company business and documents” to include
not only proprietary information but also employer-
employee matters, such as information relayed to employees
that might impact wages, hours, and working conditions or
documents furnished to employees concerning wage and
benefit information.
In our view, this case is controlled by Lafayette Park
Hotel, 326 NLRB 824 (1998), which issued subsequent
to the judge’s decision here. In Lafayette Park, the em-
ployer’s standard of conduct 17 prohibited the following
conduct:

Divulging Hotel-private information to employees or
other individuals or entities that are not authorized to
receive that information.

In finding that this standard of conduct did not violate Sec-
tion 8(a)(1), the Board found that employees would not
reasonably read this rule as prohibiting discussion of wages
and working conditions. Rather, employees reasonably
would understand that the rule was designed to protect the
employer’s legitimate interest in the confidentiality of its
private information, such as guest information, trade secrets,
and contracts with suppliers. Accordingly, the Board con-
cluded that the rule reasonably was addressed to protecting
the employer’s interest in confidentiality and did not impli-
cate employee Section 7 rights.
The Respondent’s confidentiality provision, which
bars disclosure of “company business and documents,” is
quite similar to the rule in Lafayette Park prohibiting
disclosure of “Hotel-private information.” The Respon-
dent’s confidentiality provision, like the rule in Lafayette
Park, does not by its terms prohibit employees from dis-
cussing wages or working conditions. Further, contrary
to the judge, we find that here, as in Lafayette Park, em-
ployees reasonably would understand from the language
of the Respondent’s confidentiality provision that it is
designed to protect the Respondent’s legitimate interest
in maintaining the confidentiality of its private business
information, not to prohibit discussion of wages or work-
ing conditions. The fact that the Respondent’s confiden-
tiality provision has not been enforced to prohibit em-
ployees from discussing their terms and conditions of
employment would reinforce this understanding. Conse-
quently, as we find that the Respondent’s confidentiality
provision reasonably is addressed to protecting the Re-
spondent’s legitimate confidentiality interest and does
not implicate employee Section 7 rights, we find that the
Respondent’s promulgation of the confidentiality provi-
sion in its employee handbook does not violate Section
8(a)(1).
Contrary to our dissenting colleague, we do not find
that the Respondent’s confidentiality provision would
“chill” employees’ rights by requiring employees who
wish to discuss information about employment terms and
conditions to either (a) discuss such information and risk
discipline or (b) forgo discussion and give up a right pro-
tected by the Act. In finding such “chilling” effect, our
dissenting colleague relies on cases concerning employ-
ers’ rules that, unlike the Respondent’s confidentiality
provision here, either prohibited discussion of specific
terms and conditions of employment (L. G. Williams Oil
Co., 285 NLRB 418, 423 (1987) (barring discussion of
salaries); Medeco Security Locks v. NLRB, 142 F.2d 733
745 (4th Cir. 1998) (barring disclosure of employee’s
retaking required skill test or disclosure that employee
passed drug test); NLRB v. Vanguard Tours, Inc., 981
F.2d 62, 66–67 (2d Cir. 1992) (barring discussion of
wages and terms of employment) or forbade conduct that
clearly implicated Section 7 rights (Ingram Book, 315
NLRB 515 (1994) (distribution of literature); Arkansas-
Best Freight System, 257 NLRB 420, 424 (1981) (no-
solicitation, no-distribution rule). In contrast to the rules
at issue in those cases, the Respondent’s confidentiality
provision here would be reasonably understood by em-
ployees not as restricting discussion of terms and condi-
330 NLRB No. 29
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 264
tions of employment but, rather, as intended to protect
solely the legitimate confidentiality of the Respondent’s
private business information, as it was meant to do.1
Moreover, unlike our colleague, we do not find the
meaning of the terminology employed by the Respon-
dent’s rule, “company business and documents,” to be
significantly different from or broader than the “Hotel-
private information” language used in Lafayette Park
Hotel to describe the information to be kept confidential
under the rule.
Our colleague seeks to distinguish this case from La-
fayette Park on the basis that the rule there expressly
provided that certain employees and others were author-
ized to receive “Hotel private information.” The instant
rule contains no such express provision. However, we do
not believe that the absence of an express provision in
the instant case warrants a result contrary to Lafayette
Park. Certainly, the absence of an express proviso does
not broaden the scope of the primary prohibition. Fur-
ther, even without an express proviso, employees would
reasonably understand that they can share business in-
formation with fellow employees and other who have a
need to know. Reasonable persons understand that an
enterprise can hardly function without such a flow of
information.2

1 In contending that the Respondent’s confidentiality provision is
overbroad and fails to define the impermissible conduct, our dissenting
colleague relies on several cases concerning rules issued by employers,
all of which presented circumstances significantly different than those
before us here. In Advance Transportation, 310 NLRB 920 (1993), the
employer’s issuance of the rule in question was, as noted by the judge,
“targeted at the employees’ union election activities then underway,”
310 NLRB at 925, and, further, occurred in the context of unlawful
employee warnings and discharges similarly aimed at the employees’
Sec. 7 activities. In Fremont Mfg. Co., 224 NLRB 597, 603–604
(1976), enfd. 558 F.2d 889 (8th Cir. 1977), the rule cited by our col-
league was issued shortly after both the start of a union organizing
campaign and the employer’s unlawful discharge of the employee who
had initiated the campaign. In Lexington Chair Co., 150 NLRB 1328
(1965), enfd. 361 F.2d 283 (4th Cir. 1966), the judge found that the rule
in question, “[c]oming as it did on the heels of the opening of an anti-
union campaign by Respondent . . . was designed to combat the antici-
pated expression of union sympathies.” 150 NLRB at 1341. Thus, in all
three of these cases, the challenged rules were adopted to counter union
activity and reasonably would have been understood by employees as
having such a purpose. In the present case, however, the Respondent’s
confidentiality rule was not adopted in response to union activity, and
the judge found that the Respondent did not intend to preclude or limit
union organizing activity or other protected concerted activity. Further,
the rule at issue in Pontiac Osteopathic Hospital, 284 NLRB 442, 466
(1987), also cited by our colleague, banned discussion of, inter alia,
“employee problems,” and thus clearly trenched on employees’ Sec. 7
rights. The Respondent’s confidentiality provision, on the other hand,
bars disclosure only of “company business and documents” and con-
tains no language prohibiting discussion of employee problems or
grievances.
2 Nor do we agree with our colleague (at fn. 4 of her dissent) that the
rule here “differs substantially” from the rule found to be permissible in
Aroostook County Regional Ophthalmology Center v. NLRB, 81 F.3d
209 (D.C. Cir. 1996), which was cited and relied on by the majority in
Lafayette Park. At the outset, we note that our colleague raised the
same argument in her joint dissent in Lafayette Park and it is no more
Our dissenting colleague also relies on the fact that the
other provisions in the handbook relate to terms and con-
ditions of employment. However, this fact does not aid
our colleague’s position. The ban on disclosure of confi-
dential information is itself a condition of the employees’
employment. Thus, the ban is properly in the handbook.
But, this does not mean that the phrase “company busi-
ness and documents” relates to terms and conditions of
employment.
For all the foregoing reasons, we shall dismiss the
complaint.
ORDER
The complaint is dismissed.

MEMBER LIEBMAN, dissenting.
Contrary to my colleagues, I agree with the administra-
tive law judge that the Respondent violated Section
8(a)(1) of the Act by maintaining an overly broad confi-
dentiality rule in its employee handbook. I rely on the
judge’s reasoning and on the rationale in the dissenting
opinion in Lafayette Park Hotel,1 which was issued sub-
sequent to the judge’s decision herein.
Since August 1994, the Respondent has distributed a
company handbook to each new employee. The hand-
book includes, inter alia, provisions about employee
benefits,2 and company rules and regulations.3 The
handbook’s “Confidentiality” rule states, in full: “Com-
pany business and documents are confidential. Disclo-
sure of such information is prohibited.” Employees must
sign an acknowledgment of receipt of the handbook.
The judge found, and the General Counsel and the
Charging Party do not dispute, that the confidentiality

persuasive here than it was there. In Aroostook, the Board had found a
violation of the Act in a rule which stated that “no office business is a
matter for discussion with spouses, families or friends.” The court
reversed. In doing so, the court, inter alia, noted the employer’s argu-
ment that the rule was designed only to prevent employees from dis-
cussing patient medical information with persons outside of the office.
The court indicated “[t]his construction of the rule is supported by the
rule’s placement” in the manual at the end of a long discussion where
“office business” was used to refer to confidential patient medical
information. But the rule’s placement in the manual was not the sine
qua non of the court’s holding. Rather, it is clear, as described at fn. 11
of the majority opinion in Lafayette Park that “[i]n denying enforce-
ment [the court concluded] that the rule on its face was not unlawful
and finding that, absent evidence that the employer was imposing an
‘unreasonably broad interpretation of the rule upon employees, the
Board’s determination to the contrary [was] unjustified.’’’ 81 F.3d at
212–213. That same parity of reasoning is applicable here and the
court’s decision in Aroostook fully supports the result we reach.
1 326 NLRB 824 (1998).
2 The 17-page handbook contains 86 separate sections. The hand-
book’s table of contents is set forth in full in sec. III,B,2 of the judge’s
decision. There are sections on, inter alia, work hours and work sched-
ule; timecards, rest periods, paychecks, wage reviews, pay grade level
structure, wage increases, overtime, safety, savings and pension plans,
disability income, various forms of leave, vacation, life insurance, and
health insurance.
3 There are sections on, inter alia, personal appearance, tardiness and
absenteeism, leaving the work area, honesty and integrity, disciplinary
procedures, and confidentiality.
SUPER K-MART 265
rule is intended only to prevent disclosure of what the
Respondent considers proprietary information, such as
sales reports, costs for goods, marketing strategy, profits,
computer software and programming, and pricing infor-
mation. None of those proprietary subjects, however, is
even mentioned, much less discussed, in the employee
handbook. Rather, the handbook discusses almost exclu-
sively terms and conditions of employment, and the con-
fidentiality rule appears in the midst of those provisions.4
Moreover, as the judge noted, the Respondent has
never told the employees that the confidentiality rule is
intended only to prevent disclosure of proprietary infor-
mation. More pointedly, the Respondent has never told
its employees that the confidentiality rule does not pro-
hibit them from discussing their terms and conditions of
employment with anyone else or engaging in union or-
ganizational or other protected concerted activity. Under
these circumstances, I agree with the judge that the em-
ployees could reasonably interpret the confidentiality
rule as prohibiting them from discussing information
provided to them (either verbally or in writing) by the
Respondent about their terms and conditions of employ-
ment.
To illustrate, the Respondent might inform the em-
ployees that it has become dissatisfied with their health
care insurance provider because of administrative defi-
ciencies and has decided to change to a different insur-
ance company. The Respondent might provide the em-
ployees with written information about the new company
and comparisons of the rates and coverages under the old
and new plans. Confronted by the confidentiality rule,
employees could quite reasonably believe that they were
prohibited, individually or collectively, from showing
that information to an outside health care insurance con-
sultant to obtain an explanation and guidance about their
new plan.
In upholding the rule here, my colleagues rely on the
majority opinion in Lafayette Park Hotel, supra. There,
the employer maintained a rule in its employee handbook
that expressly prohibited employees from “[d]ivulging
Hotel-private information to employees or other indi-
viduals or entities that are not authorized to receive that

4 In this respect, the rule in this case differs substantially from the
rule which the court found to be permissible in Aroostook County Re-
gional Ophthalmology Center v. NLRB, 81 F.3d 209 (D.C. Cir. 1996).
In that case, the employer had a rule in its office policy manual which
stated that “no office business is a matter for discussion with spouses,
families or friends.” The court found that this rule was not overbroad,
relying in particular on its placement in the policy manual, following a
long section about patient confidentiality in which the term “office
business” was used to refer to confidential patient information. Id. at
213. In contrast, in this case there is no such context for the Respon-
dent’s rule. In fact, the context, an employee handbook that discusses
only terms and conditions of employment, could reasonably lead an
employee to believe that information and documents concerning terms
and conditions of employment are within the reach of the Respondent’s
rule.
information.”5 The majority found that maintenance of
that rule did not interfere with, restrain, or coerce em-
ployees in the exercise of their rights under Section 7 of
the Act. In agreement with the employer, the majority
held that (1) the rule was in furtherance of the em-
ployer’s substantial and legitimate interest in maintaining
the confidentiality of private information, including hotel
guest information, trade secrets, contracts with suppliers,
and a range of other proprietary information, and (2) the
rule unambiguously prohibited employees only from
disclosing private, confidential business records and in-
formation, and not from discussing terms and conditions
of employment.6 Thus, the majority found that, although
the term “Hotel-private” was not defined in the rule, em-
ployees would reasonably understand that the rule was
designed to protect the employer’s interest in maintain-
ing the confidentiality of private information. Nor, ac-
cording to the majority, would employees reasonably
interpret the rule as prohibiting discussion of wages and
working conditions among employees or with a union.7
The majority in this case analogizes that “Hotel-
private” rule with the confidentiality rule at issue here on
the grounds that neither rule expressly prohibits employ-
ees from discussing wages or other working conditions.
Further, in their view, employees would reasonably un-
derstand from the language of these rules that they were
designed to protect an employer’s legitimate interest in
maintaining the confidentiality of private business infor-
mation, and not to prohibit discussion of wages or other
working conditions.
In my view, the confidentiality rule suffers from the
same infirmity as the “hotel private rule” in Lafayette
Park Hotel. Its blanket prohibition on disclosing “com-
pany business and documents” is overbroad and fails to
define or delimit the impermissible conduct. See Ad-
vance Transportation, 310 NLRB 920, 925 (1993) (rule
prohibiting employees from discussing “company affairs,
activities, personnel, or any phase in operations with un-
authorized persons” is unlawful on its face); Fremont
Mfg. Co., 224 NLRB 597, 603–604 (1976), enfd. 558
F.2d 889 (8th Cir. 1977) (rule prohibiting employees from
“making any statement or disclosure regarding company
affairs, whether expressed or implied as being official,
without proper authorization from the company” is un-
lawful restriction on employee rights); Lexington Chair
Co., 150 NLRB 1328 (1965), enfd. 361 F.2d 283, 287
(4th Cir. 1966) (rule prohibiting employees from “criti-
cizing Company rules and policies so as to cause
confusion or resentment between employees and man-
agement” is unlawful). In affirming the Board in Lexing-
ton Chair, the court stated:

5 326 NLRB 824, supra (Standard of Conduct 17).
6. Supra.
7 Id.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 266
[M]anagement was not entitled to promulgate a rule so
general in its terminology and so broad in its apparent
coverage as to inhibit legitimate organization activity
by pro-union employees. To the average employee the
rule might well have meant that any criticism of man-
agement, resulting in aid to the Union campaign, would
bring swift and severe reprisal. “The true meaning of
the rule might be the subject of grammatical contro-
versy. However, the employees . . . are not grammari-
ans. The rule is at best ambiguous and the risk of am-
biguity must be held against the promulgator of the rule
rather than against the employees who are supposed to
abide by it.” [Citing NLRB v. Miller, 341 F.2d 870, 874
(2d Cir. 1965).]

The majority’s attempt to distinguish these cases is unavail-
ing. The dispositive consideration in ultimately finding
each of the rules to be unlawful was that the rules on their
face, regardless of the impetus for their promulgation, had a
reasonable tendency to inhibit employees in the exercise of
their Section 7 rights. Thus, notwithstanding the judge’s
finding in Advance Transportation that the rule in question
was “calculated” to cause employees to refrain from engag-
ing in any protected activities, 310 NLRB at 925, he ulti-
mately found that the rule was “unlawful on its face . . .
because it fails to define the area of permissible employee
conduct.” Id. In Fremont Mfg., the judge, without speculat-
ing on the employer’s motivation, found (and the Board
affirmed) that the rule in question was ambiguous, “subject
to various constructions, one of which is that it would re-
strict or stultify employee debate during the union cam-
paign,” and was thus an invalid restriction on the employ-
ees’ rights. 224 NLRB at 604. Finally, in Lexington Chair,
while acknowledging that the rule in question was promul-
gated against a background of expressed hostility to the
union, the court nevertheless found that the rule was unlaw-
ful, not because of its antiunion motive, but because it was
“at best ambiguous” and “so general in its terminology and
so broad in its apparent coverage as to inhibit legitimate
organization activity by pro-union employees.” 361 F.2d at
287. See also Pontiac Osteopathic Hospital, 284 NLRB
442, 466 (1987) (rule banning discussion of “hospital affairs
and employee problems . . . could reasonably be construed
by employees to preclude discussing information concern-
ing terms and conditions of employment, including wages,
which could fall under the broad categories of hospital af-
fairs and employee problems. While Respondent might
have a substantial and legitimate interest in limiting or pro-
hibiting discussion of some aspects of its affairs, or of its
employees’ personal problems . . . . it has offered no justifi-
cation for the broad policy stated in its confidential informa-
tion rule”).
My colleagues’ analysis in this case also suffers from
the same infirmity as the majority’s analysis in Lafayette
Park Hotel. It fails to recognize the tendency of a rule
like the one in question here to chill employees’ exercise
of protected rights simply because of the breadth of the
conduct that is potentially prohibited by the rule. Con-
fronted with this rule, employees, contemplating discus-
sion of wage and benefit or other information obtained
from the Respondent concerning terms and conditions of
employment, would have to choose between discussing
the information, and risking discipline, or foregoing the
discussion and giving up a right protected by the Act.
The Act prohibits an employer from forcing employees
to make that choice. Either way, their Section 7 rights
are infringed, for the threat of discipline obviously inter-
feres with, restrains, and coerces employees in the exer-
cise of a protected right. That is the essence of “chilling”
of protected rights long recognized by the Board and the
courts.8 By failing to adequately define what conduct is
encompassed, this is precisely what this nondisclosure
rule does.
Indeed, if anything, the confidentiality rule at issue
here may be even more overbroad than the Lafayette
Park Hotel “hotel private” rule. My colleagues’ attempt
to analogize these two rules actually underscores the
overbreadth of the confidentiality rule. Thus, the Lafay-
ette Park Hotel rule expressly prohibited outside disclo-
sure of only so-called “Hotel-private” information and
only to employees or other individuals or entities not
“authorized” to receive it. The confidentiality rule here,
on the other hand, expressly applies to “company busi-
ness and documents” without limitation or description,
declares this unlimited, undescribed information to be
confidential, and expressly prohibits any disclosure.
Having found the “Hotel-private” rule in Lafayette Park
Hotel to be overly broad and fatally ambiguous,9 I find, a
fortiori, that the even more broadly worded confidential-
ity rule here is unlawful for the same reasons.

Virginia Jordan, Esq., for the General Counsel.
Scott D. Rechtschaffen, Esq. (Littler, Mendelson, Fastiff, Tichy,
and Mathiason), of San Francisco, California, for the Re-
spondent.

8 See, e.g., Ingram Book Co., 315 NLRB 515, 516 (1994) (mere pos-
sibility of enforcement of rule against protected activity is coercive);
L. G. Williams Oil Co., 285 NLRB 418, 523 (1987) (implication that
employee could be disciplined for violation of rule against discussing
salaries has chilling effect on exercise of statutory rights); Arkansas-
Best Freight System, 257 NLRB 420, 424 (1981), enfd. 673 F.2d 228
(8th Cir. 1982) (employees are not required to speculate, at risk of pos-
sible disciplinary action, whether employer will enforce unlawfully
broad rule; rule has chilling effect on exercise of Section 7 rights, with-
out regard to manner of enforcement). Accord: Medeco Security Locks
v. NLRB, 142 F.3d 733, 745 (4th Cir. 1998) (Sec. 8(a)(1) reaches em-
ployer conduct which can have a deterrent effect on protected activity,
even if an employee has yet to engage in protected activity or exercise a
protected right); NLRB V. Vanguard Tours, Inc., 981 F.2d 62, 66–67
(2d Cir. 1992) (promulgation of overly broad rule that could reasonably
be read as prohibiting employees from making statements about wages
and terms of employment has a likely chilling effect on employees’
exercise of Section 7 rights, even absent evidence of actual enforce-
ment of rule).
9 326 NLRB at 834 (dissent).
SUPER K-MART 267
Michael T. Anderson, Esq. (Davis, Cowell & Bowe), of San
Francisco, California, for the Union.
DECISION
STATEMENT OF THE CASE
GERALD A. WACKNOV, Administrative Law Judge. Pursuant
to notice, a hearing in this matter was held before me in Oak-
land, California, on January 21, 1997. Following the filing of
various charges between July 23 and September 10, 1996, by
United Food and Commercial Workers Union, Local 870,
AFL–CIO, CLC (the Union), the Regional Director for Region
32 of the National Labor Relations Board (the Board) issued a
consolidated complaint and notice of hearing on December 19,
1996, alleging various violations by K-Mart and Super K-Mart
Center (each the Respondent) of the National Labor Relations
Act (the Act). Thereafter, various cases were settled and sev-
ered from the instant matter, and the current consolidated com-
plaint alleges violations by the Respondent of Section 8(a)(1) of
the Act. The Respondent’s answers to the complaint deny the
commission of any unfair labor practices as alleged.
The parties were afforded a full opportunity to be heard, to
call, examine and cross-examine witnesses, and to introduce
relevant evidence. Since the close of the hearing, briefs have
been received from counsel for the General Counsel, counsel
for the Union, and counsel for the Respondent. Upon the entire
record, and based upon my observation of the witnesses and
consideration of the briefs submitted, I make the following
FINDINGS OF FACT
I. JURISDICTION
The Respondent is a Michigan corporation engaged in the re-
tail sale of general merchandise and related products via stores,
warehouses, offices, and other facilities throughout the United
States, including a store located in Oakland, California. In the
course and conduct of its business operations the Respondent
annually derives gross revenues in excess of $500,000, and
annually purchases and receives goods valued in excess of
$50,000 which originate outside the State of California. It is
admitted, and I find, that the Respondent is now, and at all
times material herein has been, an employer engaged in com-
merce within the meaning of Section 2(2), (6), and (7) of the
Act.
II. THE LABOR ORGANIZATION INVOLVED
It is admitted, and I find, that the Union is, and at all times
material has been, a labor organization within the meaning of
Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Issues
The principal issues raised by the complaint are whether the
Respondent at its Oakland, California Super K-Mart Center,
unlawfully relocated its employee break area from outside the
employee entrance to the garden center of the store in order to
limit the access of union representatives to its employees during
breaktimes, in violation of Section 8(a)(1) of the Act; and
whether the Respondent, on a nationwide basis, has promul-
gated an unlawful “Confidentiality” provision in its employee
handbook which would reasonably tend to inhibit employees
from engaging in lawful union and/or protected concerted
activity, in violation of Section 8(a)(1) of the Act.

B. The Facts
1. Case 32–CA–15575
Terrence Burnell is the store director of the Oakland, Cali-
fornia Super K-Mart center. He has been a store director of
about five different K-Mart stores prior to assuming his current
position in August or September 1995, prior to the store’s open-
ing on November 13, 1995. There were some 40 to 60 employ-
ees in August and September 1995, and over 1000 employees
as of the date the store opened for business. At his other stores,
which had no separate employee entrances, Burnell established
the policy of locating the employee’s smoking area in the gar-
den center, an outdoor fenced-enclosed area connected to the
store, which was set aside for the sale of plants and related
garden materials. Burnell testified that matters of this nature
were left to the discretion of the store directors, and for safety
and security reasons, as well as for the sake of appearance, he
preferred to have the employees take their breaks in designated
areas inside the confines of the store. Explaining, Burnell testi-
fied that some of the stores were in “rougher neighborhoods”
and he believed that employees would be safer inside the store
rather than outside where they could have a potential problem
with outsiders. The instant store, according to Burnell, was
located in such a neighborhood. In addition, he believed that
the less ingress and egress to and from the store during the
employees’ shifts would assist in minimizing employee theft.1
Prior to the opening of the store, in accordance with his past
practice, Burnell had located the smoking area (which was
utilized as an outdoor break area for smokers and nonsmokers
alike) in the garden center. However, at about the time the store
opened for business, due to the great influx of merchandise in
addition to garden center merchandise, the garden center was
inundated with overstock merchandise and fixtures and there
simply was no room to set aside in the garden center for a break
area. At that point, during one of the morning meetings,
Burnell told the employees that the smoking area (outdoor
break area) was being moved from the garden center to the
employee entrance of the store, located near the rear of the
building. He further told them that this would be a temporary
measure and that as soon as practicable the outdoor break area
would be moved back to the garden shop or possibly to a dif-
ferent enclosed area.2 The overstock problem in the garden
center increased in January 1996, when certain garden center
merchandise (plants and live goods) began arriving, and it was
not until July that the situation became controllable and permit-
ted Burnell to restore the break area to the garden center, where
he placed some umbrella tables and set aside a separate isolated
area for the employees to take their breaks. This area is not a
public area and is off limits to the general public.
Burnell testified that prior to the opening of the store he and
others were involved in attempting to obtain public bus service
to and from the store for the benefit of the employees and cus-
tomers, as bus transportation was not conveniently nearby. A
private consulting firm was hired to handle the details of this
endeavor, which became quite complicated and convoluted, as
1 Peter Franklin, a private security consultant, essentially corrobo-
rated the testimony of Burnell regarding matters of safety and loss
control, and testified that for the reasons stated it is always preferable to
have employee break area located inside of the confines of store prem-
ises.
2 Under consideration was an option to enclose an area behind the
store with a fence for use as an outdoor break area.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 268
well as expensive. Thus, to obtain such service, namely, bus
stops on store property located adjacent to the employee en-
trance and near the customer entrance, the Respondent would
be required to pay AC Transit, the public bus service provider,
some $100,000 for the route. Nevertheless, this was deemed
acceptable and on about July 11, after making the necessary
changes to the property required by AC Transit, Burnell, ac-
companied by consultant Scott Mommer, president of Lars
Anderson & Associates, met with an AC Transit representative.
According to Burnell, it appeared that as a result of this meet-
ing bus service would begin as soon as K-Mart completed cer-
tain additional improvements on its property, which should
have taken only about 2 weeks.3 Prior to this date the Respon-
dent had already constructed a concrete island adjacent to the
employee entrance as a bus stop, and had painted crosswalk
lines from the island to the employee entrance; in addition it
had completed other improvements required by AC Transit.
Burnell testified that from 40 to 50 percent of its associates did
not have private vehicles, and door-to-door bus service would
have been benefited the employees as well as the Respondent.
The record shows that some weeks or months thereafter the
Respondent was advised that AC Transit wanted some
$300,000 before it would commence bus service. This was
deemed unacceptable although the matter is still being pursued.
To date, no bus service has been implemented.
Burnell testified that during one of the regular biweekly
morning meetings in mid-July, sometime after the aforemen-
tioned July 11, 1996 meeting, he announced to the associates
that bus service, with a bus stop located adjacent to the em-
ployee entrance, would be beginning and that thereafter the
outdoor break area would be relocated to the garden center.4
Also, a note was posted on the door to the employee entrance
specifying that no breaks or lunches would be thereafter be
permitted in the employee parking lot. Burnell testified that it
had always been his intention to return the break area to the
garden center at an appropriate time, as he did not want the
employees to take their breaks outside the premises for the
reasons stated above. Moreover, having employees congregate
around the bus stop area presented further safety concerns.
Thus, the freeing-up of garden center space, coupled with, he
believed, the imminent arrival of public bus service at the em-
ployee entrance, resulted in his decision to designate the garden
area as the new outdoor break area for the associates. Burnell
testified that the union organizational activity outside the em-
ployee entrance, infra, had nothing to do with his decision.
This change in the break area from outside the store to inside
the store impacted the Union’s organizing drive which had
commenced in January 1996. Thus, from January to mid-July
union representatives would frequently meet with employees
outside the store at the employee entrance during their breaks
and solicit authorization cards, distribute campaign literature,
and engage in related union activities. This was no longer pos-
sible after the relocation of the break area, as the garden center
was off limits to the public (including union representatives).
Therefore, the change limited the Union’s ability to solicit to
the beginning and ending of work shifts and at lunchtime (when

3 According to Mommer, however, K-Mart was to complete certain
improvements on its property within 1 to 2 weeks, and bus service
would begin in September.
4 Employee Valentina Sherman-Cruz, called as a witness by the
General Counsel, essentially corroborated this testimony of Burnell.
employees were permitted to leave the store premises for their
1-hour lunch period).
The General Counsel and the Union contend that the change
of the break area on about July 19 coincided with the Union’s
filing of a representation petition on the same date, and an inci-
dent on about July 10, during which a confrontation occurred
between a union representative and a store security guard who
was taking her break outside the employee entrance.5 Coupled
with the fact that bus service has never been established, it is
argued that the Respondent’s relocation of the break area was
more than coincidental, and was contrived as a method to in-
hibit the Union’s ongoing organizational campaign.
2. Cases 32–CA–15662–1 and 32–CA–15662–2
Since August 1994, the Respondent has distributed to each
new employee throughout the United State a K-Mart Associate
handbook entitled “We’re Glad You’re Here.” The handbook
is some 17 pages in length, and contains information about the
Respondent, and includes provisions regarding employee bene-
fits, and store rules and regulations. Employees who are given
the handbook are required to sign an acknowledgment that they
have received it. The handbook’s table of contents is as fol-
lows:

Table of Contents
Equal Employment Opportunity 1
Customer Care 1
Open Door Policy 1
Definition of Associate Status 1
Work Hours and Work Schedule 2
Associate Work Schedules 2
Time Cards 2
Rest Periods 2
Paychecks 2
Change in Status 2
Associate Annual Review 2
Wage Reviews 2
Pay Grade Level Structure 3
Promotional Increase 3
Wage Increase 3
Longevity Increase 4
Overtime 4
Parking 4
Personal Appearance 4
Appropriate Dress and Appearance 4
Garden Shop and Processing CenterDepartments 4
Eating, Drinking and Chewing Gum 5
Sexual Harassment 5
Smoking 5
Intoxicants and Narcotics 5
Employment of Relatives 5
Tardiness and Absenteeism 5
Leaving Work Area 5
Lockers 5
Gifts from Vendors 6
Salvage Merchandise 6
Associate Purchases 6
Associate Layaway 6
General Store Meetings 6
Merchandise for Store Use 6
Associate Entrance and Exit 6
Safety 6
Firearms and Other Weapons 6
Telephone 6
5 As a result of this incident, respective charges were filed by both
the Union and the Respondent, and were thereafter dismissed.
SUPER K-MART 269
Lost and Found 6
Honesty and Integrity 6
Loss Control 7
Unauthorized Discounts 7
Associate Lounge 7
Company Bulletin Boards 7
Transfers 7
Rehired/Re-employed 7
Confidentiality 7
Solicitation and Distribution of Printed Material 7
Disciplinary Procedures 7
Associate Benefits 7
Savings Plan 8
Pension Plan 9
Group Term Life Insurance and Accidental
Death or Dismemberment Insurance 9
Travel Accident Insurance 9
Comprehensive Health Plan 9
Dental Assistance Plan 10
Employee Assistance Program (EAP) 10
Prenatal Education Program 11
Health and Fitness Newsletter 11
Adoption Assistance Plan 11
National Child Care Discount Program 11
Disability Income Plan 11
Approved Leave of Absence 12
Medical Leave 12
Personal Leave 12
Family and Medical Leave 12
Military Leave 12
Paid Vacation 13
Paid Sick and Personal Leave Time 13
Paid Holidays 13
Associate’s Birthday 14
Associate Discount 14
Funeral Leave Pay 14
Jury Service 14
U.S. Savings Bonds 14
Suggestion Awards 14
Kmerchant (Associate Magazine) 15
Service Recognition 15
Scholarship Program 15
Matching Gifts Program 15
Associate of the Month Program 16
ConCern: Loans for Education 16
K-Notes and Bonus Notes 16

Each of the foregoing headings is placed in a box beneath
which appears one or more explanatory paragraphs.
The only section of the handbook at issue herein is a two-
sentence provision appearing on page 7 under the heading of
“Confidentiality,” as follows:

Company business and documents are confidential.
Disclosure of such information is prohibited.

The record is clear that the Respondent does not and has not
intended this rule to preclude or limit union organizational ac-
tivity or other protected concerted activity. An affidavit sub-
mitted by Peter Palmer, Respondent’s vice president, labor
relations and assistant general counsel, states as follows:

This provision was and is only intended to apply to
those items within a K-Mart facility that would properly
be considered proprietary information, such as sales re-
ports, costs for goods, marketing strategy, profits, com-
puter software and programming, pricing information, and
marketing strategies.
This provision was and is not intended to discourage
employees from discussing the terms and conditions of
their employment with anyone else.
Since the adoption of this version of the handbook, I
have no knowledge of any employee ever being disci-
plined, terminated or threatened with discipline or termi-
nation because this policy was interpreted to mean that
employees could not discuss terms and conditions of em-
ployment. This provision is not enforced to prohibit em-
ployees from discussion the terms and conditions of their
employment with others.
With the exception of the matter herein, this provision
has never been the subject of a National Labor Relations
Board charge, nor have any of K-Mart’s 300,000 plus as-
sociates ever filed a charge with the NLRB relative to this
paragraph.

There is no record evidence that would contradict any of the
aforementioned assertions of the Respondent. However, the
parties agree that the Respondent has never announced to its
employees, either verbally or in writing, that the “Confidential-
ity” provision should not be interpreted to mean that it is, in any
way, designed to preclude their lawful union and/or concerted
protected activity.
Accordingly, the Complaint alleges, and the General Counsel
and the Union maintain, that the “Confidentiality” provision is
per se unlawful as the prohibition of the disclosure of “com-
pany business and documents” could reasonably be read and
understood by employees to encompass matters which pertain
to their wages, hours, and conditions of employment, such as
information obtained during employer-employee meetings,
information contained in wage and benefit documents, and
similar matters, the disclosure of which could potentially sub-
ject them to discipline.
C. Analysis and Conclusions
1. Case 32–CA–15575
I credit the testimony Store Director Burnell, and find that
the relocation of the break area from the employee entrance to
the garden center in July, 1996, was not discriminatorily moti-
vated. Thus, assuming arguendo that the General Counsel has
presented a prima facie case of unlawful motivation, the credi-
ble record evidence shows that the break area was initially in
the garden center prior to the opening of the store; that Burnell
had always intended to return it to that location when business
conditions so permitted and initially advised the employees that
the move was of a temporary nature; that the rationale for des-
ignating the garden center as the break area appears to make a
great deal of sense for safety and security and loss prevention
purposes; and that Burnell believed as a result of the July 11
meeting with AC Transit that bus service outside the employee
entrance would commence several weeks thereafter.6
Finally, it is reasonable to presume that if the Respondent
was motivated by a desire to interfere with its employees’ un-
ion activity as alleged, it would have relocated the break area
to the garden shop within a short time after the commencement

6 I am mindful that Scott Mommer, a consultant whom Burnell ac-
companied to the meeting, testified that he believed the bus service
would not begin until some six months thereafter; nevertheless, I credit
Burnell’s testimony that he was of the opinion that bus service would
begin within two weeks, and thus notified the employees that bus ser-
vice was imminent.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 270
of the union activity, in January 1996, rather than waiting some
6 months thereafter to implement the change. Nor is there any
record evidence of union animus by K-Mart managers or su-
pervisors. Accordingly, I conclude that the Respondent has
satisfied its burden under Wright Line7 by demonstrating that it
moved the break area from outside the employee entrance to
the garden center for lawful business considerations, and I shall
dismiss this allegation of the complaint.
2. Cases 32–CA-–15662–1 and 32–CA–15662–2
Regarding the “Confidentiality” handbook provision that is
contained in the current employee handbook and distributed on
a nationwide basis to each of the Respondent’s associates upon
their being hired, Board law is clear that such provisions, even
though ambiguous, are per se unlawful. Aroostock County Re-
gional Opthamology Center, 317 NLRB 218, 224 (1995), enf.
denied in pert. part 81 F3d 209 (D.C. Cir. 1966). In the instant
matter the Respondent has taken no action to formally advise
employees that the “Confidentiality” provision should not be
understood to limit their union or protected concerted activity.
See Our Way, Inc., 268 NLRB 394 (1983); Ichikoh Mfg., Inc.,
312 NLRB 1022 (1993). Under the circumstances herein, par-
ticularly as the “Confidentiality” provision is simply one of
many provisions seemingly included in the handbook on a ran-
dom basis8 and does not appear in a limiting context which
would give it some narrower meaning,9 it is reasonable to con-
clude that the provision could be interpreted by employees to
proscribe and inhibit their union activity, as alleged. In this
circumstance, the intention of the Respondent that the provision
was designed to prohibit the disclosure of only proprietary in-
formation is not controlling.
Thus, it is clear that employees could reasonably interpret
the language “company business and documents” to include

7 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert.
denied 455 U.S. 989 (1982), approved in NLRB v. Transportation
Management Corp., 462 U.S. 393 (1983).
8 See Associate Handbook topics listed under “Table of Contents,’’
supra.
9 Cf. the opinion of the D.C. Circuit in Aroostock County Regional
Opthamology Center, supra.
more than proprietary information: company business could
reasonably encompass any employee-employer matters such as,
for example, information relayed to employees during store
meetings which might impact on their wages, hours, and work-
ing conditions; and company documents could refer to any
documents furnished to employees such as, for example, confi-
dential wage and benefit information. These are clearly matters
which employees have the right to divulge to others in further-
ance of union or protected concerted activity. Accordingly,
even though the Respondent did not intend that the instant pro-
vision preclude permissible union activity, I find that by incor-
porating this provision in the employee handbook which is
disseminated to all new employees the Respondent is violating
Section 8(a)(1) of the Act, as alleged.
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the meaning of
Section 2(5) of the Act.
3. The Respondent has violated Section 8(a)(1) of the Act
by promulgating, on a nationwide basis, an unlawful “Confi-
dentiality” provision in its employee handbook.
4. The Respondent has not engaged in other violations of the
Act, as alleged.
THE REMEDY
Having found that the Respondent has violated and is violat-
ing Section 8(a)(1) of the Act, I recommend that it be required
to cease-and-desist therefrom and from in any like or related
manner interfering with, restraining, or coercing its employees
in the exercise of their rights under Section 7 of the Act.
Moreover, the Respondent shall be required to rescind the cur-
rent “Confidentiality” provision from its Associate handbook,
and to post at each of its K-Mart Stores and Super K-Mart Cen-
ters throughout the United States an appropriate notice, at-
tached hereto as “Appendix.” [Omitted from publication.]
[Recommended Order omitted from publication.]