Employment Law Questions? Ask an Employment Lawyer.
The language in the policy is legal and enforceable assuming it is consistently and equally applied to all employees. A company, non-profit or not, has the right to protect its business. Where the matter becomes less clear is what is considered "confidential" - in other words is it truly something that company has a right to expect be kept private or is it otherwise common knowledge and not confidential at all. Further, if such a policy is not consistently and equally applied to all employees, then the inference arises that it is used to discriminate against certain employees over others.
To directly answer your question - no it is not per se illegal, but the facts and circumstances behind its application may render its usage illegal.
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I see. Clearly that wasn't a breach of confidentiality - there is nothing confidential about any of this. So the question then arises, was the director's decision illegal or in violation of your contract of employment despite it not being because of a breach of confidentiality. If this employer is at will (meaning there is no contract or policy that states the employer must have a just cause for termination), the director really wouldn't need any reason to terminate you - but in reality they need a legitimate business reason because people aren't generally fired for no reason. If you were fired for no reason or a reason that seems contrived like this, then an inference may arise that you were discriminated against illegally.
If the employer is a "just cause" employer, then clearly they broke that contract in your termination because the termination was not accurate or part of their stated policies.
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