Texas Instruments Inc.

National Labor Relations Board - Board Decisions

Jan 15, 1980

247 N.L.R.B. 253 (N.L.R.B. 1980)

TEXAS INSTRUMENTS INCORPORATED
Texas Instruments Incorporated and International
Union of Electrical, Radio and Machine Workers,
AFL-CIO. Case 1-CA-13191
January 15, 1980
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
PENELLO AND TRUESDALE
On May 16, 1978, the Board issued its Decision and
Order in the above-entitled proceeding.' Therein, the
Board, in agreement with the Administrative Law
Judge, found that Respondent (also referred to herein
as TI) had engaged in certain unfair labor practices
within the meaning of Section 8(a)(3) and (1) of the
Act by discharging six employees who, while engaged
in organizational leafleting, knowingly distributed
material which contained classified wage survey infor-
mation, including Respondent's competitors' wage
rates, in violation of one of Respondent's security
rules.' In so finding, the Administrative Law Judge
refused to equate the above-released wage data with
any military or commercial secrets whose disclosure
could injure or destroy Respondent's business. Fur-
ther, the Administrative Law Judge found that, by so
closely connecting its own wage rates to the wage
survey's results, Respondent had in effect incorporat-
ed the other companies' wage scales into its own and
therefore Respondent could place no "greater restric-
tion on the discussion or disclosure of other employ-
ers' wages than it . . . [could] place on the discussion
of its own wages." Finally, the Administrative Law
Judge rejected Respondent's assertion that the em-
ployees were genuinely discharged for violation of TI's
security rule and found the terminations to be motiva-
ted by the intent to discourage the employees' protect-
ed concerted activity. The Board also adopted the
Administrative Law Judge's finding that another of
Respondent's rules, prohibiting employees from dis-
cussing its own wage schedules with nonemployees,
substantially interfered with the employees' organiza-
tional efforts and therefore violated Section 8(a)(1) of
the Act.
' 236 NLRB 68.
: The pertinent rule appears in Respondent's handbook in the following
form:
The following major infractions may be considered grounds for termina-
tion: ... Disclosure of classified material to unauthorized persons.
Texas Instruments Incorporated v. N.L.R.B.. 599 F.2d 1067 (Ist Cir.
1979).
' In fn. 3 of its decision, the court noted that the Board adopted the
Administrative Law Judge's Decision with no elaboration on what the court
viewed as the deficiencies in his Decision.
' In its decision the court suggests that, if alternative means of acquiring the
247 NLRB No. 37
Thereafter, Respondent filed a petition for review of
the Board's May 16, 1978, Order before the United
States Court of Appeals for the First Circuit, and the
Board filed a cross-petition seeking enforcement of its
Order. On June 4, 1979, the court issued its opinion'
enforcing the Board's Order with regard to its finding
that Respondent violated Section 8(a)(1) of the Act by
prohibiting its employees from discussing its own
wage scales. The court, however, set aside the Board's
Order as to the 8(a)(3) and (1) violations based on the
discharges, and remanded the case to the Board for
further proceedings in accordance with its opinion.
The court noted that the Administrative Law Judge
failed to cite any case authority in support of his
decision on the merits of the discharge issue and to
include an "analytical framework" in determining that
the discharges were violative of the Act.' Further, the
court agreed with Board precedent stating that, if the
rule requiring a discharge for dissemination of classi-
fied material such as the wage survey data herein is
held to be invalid, a termination based on such a rule
would violate Section 8(a)(3) of the Act. In the court's
view, however, the issue of the validity of this rule had
never been determined. Such a determination, involv-
ing a balancing analysis between the employees'
Section 7 rights and the business justification for the
Employer's rule which adversely affects those rights
was seen by the court as being the responsibility of the
Board and being mandated by the situation herein.
The court directed, without predicting the outcome,
that "the Board must focus on the issues of the
validity of the rule invoked by the company to justify
the discharges, just as it did in Jeannette Corp. v.
N.L.R.B., 532 F.2d 916 (3d Cir. 1976)."' (599 F.2d at
1073.) Moreover, the court stated that only if the
above evaluation results in a finding that the rule is
valid would it be necessary for an assessment of the
motive behind the discharges to be undertaken,
according to the principles set out in N.L.R.B. v.
Eastern Smelting and Refining Corp., 598 F.2d 666
(Ist Cir. 1979).
Thereafter, the Board accepted the remand and by
letter dated July 25, 1979, invited the parties to submit
statements of position with respect to the issue raised
by the court's remand. The Charging Party, the
survey data were available, the Employer would not have to permit
distribution of the classified information. However, the record does not
establish that other means were "readily available" to the employees here to
acquire the same or similar data and, indeed, Respondent's position here is
based largely on the premise that such information was intended by it and the
participating companies to remain confidential. Moreover, if the information
contained in the wage survey is accessible, either from the participating
companies or from the unions which have contracts with some of these
companies, Respondent's claim that the data is confidential and cannot be
distributed is a weak one. Respondent's business justification of confidentiality
will be considered in our discussion, infra.
253
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
General Counsel, and Respondent all filed such
statements.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
Respondent Texas Instruments Incorporated is
engaged in the manufacture and sale of electronic
products, in part defense-related, at its Attleboro,
Massachusetts, plant of 5,000 employees, the only
facility of its many locations which is involved in the
instant case. None of the plant's employees is repre-
sented by a labor organization, but a group of
approximately 10 employees, known as the Union
Organizing Committee, has engaged in organizational
activities in the past 3 years to induce employees to
affiliate with the International Union of Electrical,
Radio and Machine Workers (IUE). While TI is
strongly opposed to unionization of its plants, prior to
this case it had not been found to have committed any
unfair labor practices; further, the above-mentioned
well-known union advocates have all received good
ratings on performance reviews, with at least one
being given a promotion.
Because of the nature of its business, TI maintains
an internal security system to protect its proprietary
information, classifying its data as either "TI Strictly
Private" or "TI Internal Data." The first category
contains the more confidential documents whose
release within the Company is on a "need to know"
basis limited to those workers who require the
information in their jobs, and whose deliberate disse-
mination results in immediate discharge.6 During the
approximately 20 years that this security system has
been in effect, Respondent has consistently applied
this sanction in the five cases where it had been proven
that such classified information was revealed. How-
ever, none of these instances involved the disclosure of
wage information. Further, the record also disclosed,
as found by the Administrative Law Judge, that
certain portions of the wage survey had previously
been released to employees by Respondent itself, but
apparently only on a selective basis, most favorable to
the interests of Respondent.
The released information with which we are con-
cerned herein involves wage survey analysis sheets
' Respondent's second category of classification, "TI Internal Data,"
permits disclosure of such information within the confines o TI, but prohibits
dissemination of such material outside the Company without prior authoriza-
tion. As stated above, Respondent's practice of stamping its own wage scales
as "TI Internal Data" was found by the Board to be violative of Sec. 8(a)(l) of
the Act, which finding was enforced by the court.
'The leaflets read in part as follows:
Let's organize and fight for a guaranteed raise. Let's take a look at how
the Company figures out the raises. They do a survey of what other
company's [sic in the area are paying for similar jobs. The key thing
for setting the wages in this area is what the union shops are getting.
classified by Respondent as "TI Strictly Private." The
origin of this information is as follows: In order to
determine its wage scales and pay increases and to
maintain competitive salaries, Respondent relies pri-
marily on an area wage survey it conducts among
other union and nonunion companies in the Attleboro
area performing substantially the same work as
Respondent. Respondent's solicitation of this wage
data from its competitors, including the number of
employees in each job category, and the minimum,
maximum, and average rates of pay, is accompanied
by a promise that the information obtained will be
kept confidential. After receipt of the data by Respon-
dent, it is set out in wage analysis sheets listing the
companies by name in rank order with the highest
paying company at the top. TI utilizes those sheets to
compute its wage increases, and also sends these
results to the participating companies with the excep-
tion that these transmitted results are less detailed and
identify the companies only by code letter. The
companies are then informed only of their own letter
and that of TI. These results are also accompanied by
a reminder to the competitors that the data therein has
been submitted in confidence. Record testimony does
reveal that the participating companies are also
informed that they can share such information among
themselves, if they so desire.
The events which led up to the discharges herein
began in April 1977, when a copy of TI's wage survey
analysis sheets was received by the Union Organizing
Committee from an unknown source. The committee
then decided to include in a leaflet exact reproductions
of two of the sheets, comparing the rates of two job
classifications, a grade 2-3 toolmaker and a grade 10
benchworker, at TI and the other named companies
involved in the survey. In reproducing this data, the
"Strictly Private" stamp was intentionally omitted.
Thereafter, on May 25, 1977, the above leaflets were
distributed' in the morning. Subsequent to its own
discovery of the disclosure, TI was contacted by two
of the companies who had participated in the survey
who expressed their concern about the disclosure and
the possible consequences thereof.' That afternoon,
during another session of handbilling, the distributors
were warned to discontinue their leafleting because of
the classified nature of the information contained
Take G.E., for example doing the same work we're doing but making
well over $1.00 more per hour, because workers there have struggled over
the years through their union for a decent wage. If it wasn't for these
organized places paying better wages to bring the average up, we'd be
down there with Balfours. .... So it's the struggle of our fellow workers
in unions that keep our wages where they are.
Shortly after the leaflets' distribution, Respondent conducted a survey to
gauge the participating companies' reactions to the disclosure of their wage
information. Of the 22 companies questioned, 2 indicated there would be a
probable loss of future data exchange, 2 stated future data excha:nge would be
doubtful, and 18 said the disclosures would have no effect on their future
participation in the survey.
254
TEXAS INSTRUMENTS INCORPORATED
therein. Despite these and renewed warnings, on the
morning of May 26, 1977, the six employees resumed
their activity. That afternoon Respondent interviewed
and then suspended the employees involved. Subse-
quently, on June 5, 1977, the six employees were
discharged for willfully disseminating classified mate-
rials in violation of the Company's rule.
The question now before the Board is whether or
not Respondent's rule requiring the discharge of any
individual who discloses classified material to unau-
thorized persons is valid. If the answer to this inquiry
is in the negative, as stated by the court, the discharges
based on this rule will constitute violations of the Act.
On the other hand, if analysis reveals that the rule is
valid, further assessment of Tl's motivation for the
discharges must be undertaken.
As directed by the court, the test by which the
validity of the above rule must be measured is set out
in Jeannette Corporation, supra, and has three steps.'
First, we must determine whether or not the security
rule herein adversely affects the employees' protected
rights. If this is established, the second step requires
the Board to find that Respondent fulfilled its burden
of proving that there were "legitimate and substantial
business justifications" ' ° for instituting the rule" and
applying it in the instant case. In the event of such a
finding, the final step involves balancing the diminu-
tion of the employees' Section 7 rights as the result of
the rule herein against Respondent's interests being
protected by this rule.
Following this analytical framework, we must first
decide if the employees, while leafleting, were engaged
in protected concerted activity. The Supreme Court
has stated that the employees' Section 7 right of self-
organization is dependent upon the exchange of
information about the benefits and the drawbacks to
such organization." The Third Circuit, in Jeannette
Corporation, recognized in particular the importance
of the interchange of facts about wage data in this
context in stating that "[i]t is obvious that higher
wages are a frequent objective of organizational
activity, and discussions about wages are necessary to
further that goal."" There can therefore be no doubt
in our view that the employees were engaged in
protected concerted activity by distributing handbills
containing excerpts from the Company's wage area
survey. It is clear that the employees, by engaging in
such activity, were encouraging collective action to
improve wages. This is evident from the wording of
the leaflet, set out above, which indicates that the
' Jeannette Corp. v. N. LR.B.. 532 F.2d at 918.
' Id. at 918, citing N.LR.B. v. Fleetwood Trailer Co., Inc.. 389 U.S. 375,
378 (1967). and N.LR.B. v. Jemco. Inc. 465 F.2d 1148, 1152, n. 7 (6th Cir.
1972).
" It is not claimed. and we do not find, that the rule herein was illegally
promulgated.
objective of the members of the committee in disclos-
ing the confidential wage data was to enforce their
argument that only by means of a union could higher
wages be assured. The wage information involved
herein falls within the principles set out in the
aforementioned cases as being the type of data
necessary to employees for making an informed
decision about unionization. Therefore, as we find the
handbilling herein constituted protected concerted
activity, the discharges, based on Respondent's rule,
by penalizing the employees for asserting their statuto-
ry rights, interfered with those rights and tended to
inhibit the protected activity.
The next step in our analysis involves a review of
TI's business justifications for its rule. This is not a
case of a lack of evidence tending to justify the rule,
such as the situation in Jeannette Corporation. On the
contrary, because of the highly technical and defense-
related material it handles, Respondent has in general
shown that it has seriotis security interests which it
justifiably is seeking to protect. In view of these
genuine security needs, and the fact that there is no
evidence or claim that the rule was unlawfully
promulgated, Respondent's rule, on its face, appears
to be valid. However, we must consider the applica-
tion of the rule to the employees' conduct herein in
order to obtain a true reading regarding its validity.
In its statement of position, Respondent sets forth
its reasons for classifying its wage survey information
as "TI Strictly Private." These are: (1) its assurances
of confidentiality to the participating companies in
response to their demands for privacy; (2) the conse-
quent loss of face in the business community resulting
from its failure to keep those promises; (3) the
competitive harm ensuing from the disclosure of this
detailed information; and (4) Respondent's use of this
data to determine its internal wage schedule. A close
examination of Respondent's business justifications for
applying its rule to the employees' organizational
activities herein is now necessary.
Respondent's contention that the employers in-
volved in the survey requested that the information be
kept confidential is not supported by the record, but it
is true that TI voluntarily pledged to guard the
privacy of the wage data submitted. Such an unsolicit-
ed promise of confidentiality regarding area wage
surveys has been held by the Board and the courts to
be insufficient to act as a waiver of an employer's
responsibility under the Act to bargain in good faith
with a union." While these findings have been in the
different context of a bargaining relationship, the
' N.L.R.B. v. Babcock Wilcox Ca. 351 U.S. 105, 113 (1956)
" 532 F.2d at 918.
" See, e.g., General Electric Co. v. N. LR.B. 466 F.2d 1177, 1185 (6th Cir.
1972), enfg. General Electric Company., 184 NLRH 407 (1970); 188 NLRB
911 (1971): 188 NLRB 919 (1971); 188 NLRB 920 (1971); 192 NLRB 68
(1971).
255
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
holding that such wage information collected by an
employer based on its voluntary pledge of confiden-
tiality is not confidential per se is applicable to the
instant case. Thus, we find that Respondent's classifi-
cation of this data as "TI Strictly Private" does not
automatically cloak it with such status. Further,
despite Respondent's expressed concern, there is little
evidence that the breach of this pledge by its employ-
ees resulted in damage to TI's reputation in view of a
survey of area employers taken by TI shortly after the
handbilling incident. The results indicated that 18
companies stated that the distribution in question
would have no effect on their future participation in
the area wage survey, while only 4 expressed any
possible reluctance to exchanging future wage data
with TI.
Respondent's third justification of competitive harm
for applying its security rule as the basis of the
discharges herein is also not supported by the record
evidence. The court on review itself, in part, rejected
this argument on the rule in question here in finding
Respondent's rule barring TI employees from discuss-
ing TI's own wage schedule with outsiders to be
violative of Section 8(a)(1) of the Act. The court stated
that Respondent's justification for that rule, "that
public knowledge of its wage rates would assist
competitors to figure out its costs and raid its
employees . . . [,] is utterly deflated by the fact that
TI, in mounting its annual wage survey, gives out its
own wage data to every one of its competitors within a
25 mile radius."" Further, while it is true that the
results of the area wage survey, which are sent to
participating companies and which they can share
with each other, are less detailed than the excerpted
analysis sheets in the distributed leaflet, contrary to
TI's assertion, it would be difficult for any competitor
to utilize the limited information divulged by the
handout to TI's disadvantage. That is at least in part
because it would be impossible to compute TI's
product costs from the wage information revealed in
the handbill concerning only two classifications.
Finally, Respondent argues for the confidentiality of
the data based on the fact that it utilizes this wage
data to determine the salaries it will pay its own
employees. While Respondent correctly argues that
Board precedent supports the protection of an employ-
er's private and confidential information, '" this prece-
dent does not preclude finding that this reason is
" 599 F.2d at 1073-74.
" See, e.g., Ridgely Manufacturming. Co.. Inc.. 207 NLRB 193 (1973): First
Data Resources, Inc.. 241 NLRB 713 (1979).
insufficient business justification for Respondent's
application of the rule here in view of the holding in
General Electric Company, supra. discussed above.
That is, this type of information (area wage surveys) is
not automatically entitled to be withheld as confiden-
tial documents, especially when Respondent relies on
them to determine its own wage rates. Moreover, TI
itself breached the integrity of that alleged confiden-
tiality by releasing similar information to its partici-
pating employers, and in selectively disclosing to its
employees portions of its survey to support its position
of a competitive wage scale. Thus, none of the above
reasons advanced by Respondent qualifies as sufficient
business justification to validate the rule as applied
herein. In view of this, and the fact that, as stated
above, the employees were engaged in protected
concerted activity when they distributed the leaflets in
violation of Respondent's rule, the analysis undertak-
en herein requires striking the balance in favor of the
employees in exercising their Section 7 rights as
opposed to the interest of the employer in enforcing its
rule. In addition, considering our conclusion that the
rule is not valid as applied, we need not reach the
question of Respondent's motivation for the dis-
charges.
Accordingly, on the basis of the discussion above,
including the parties' statements of position, and the
entire record in the case, we conclude that Respon-
dent's rule requiring summary termination of employ-
ees who willfully disclose classified material to unau-
thorized persons, as applied to the employees herein
who distributed leaflets containing classified wage
survey information, resulting in their discharge, is
invalid and violated Section 8(a)(l) of the Act.
Therefore, we find that the six discharges based on
this invalidly applied rule are also illegal, and in
violation of Section 8(a)(3) and (1) of the Act.
Accordingly, we reaffirm our original Decision and
Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby affirms as its Order the Order
heretofore entered in this proceeding on May 16, 1978,
reported at 236 NLRB 68.
256