The NLRB Speaks Again: Routine Confidentiality Requirements for Internal Investigations Take a Back Seat to Employees’ Section 7 Rights

Internal investigations by employers into allegations of unlawful harassment, theft or other workplace misconduct are commonplace in today’s work environment. In an effort to protect the complainant, the accused and the witnesses – not to mention the fundamental integrity of the investigation – employers typically warn those participating in the investigation that the matters discussed are confidential and are not to be discussed outside the context of the investigation. This standard common sense practice has now been deemed a potential violation of employee rights under the Section 7 of the National Labor Relations Act (NLRA) by the National Labor Relations Board.

As noted in our previous article in this issue, the NLRB is flexing its muscles to challenge employer practices in non-unionized workplaces that historically were not on the Board’s radar screen. These have included attacks on standard social media policies and employee handbook disclaimers as violations of employees’ rights to engage concerted activity. The NLRB’s July 13, 2012, ruling in Banner Health Systems is just another example of the Board’s extending its reach into non-unionized workplace. In that decision, the Board reasoned that a blanket confidentiality warning to employees during the course of an internal investigation could discourage employees from seeking the support of co-workers in pursuing or defending a claim of workplace misconduct. Because Section 7 of the NLRA accords employees the right to freely communicate with co-workers about the terms and conditions of employment without fear of retaliation by the employer, the Board concluded that any suggestion by the employer to maintain the confidentiality of the investigation could discourage employees from exercising these rights.

Although the Board stopped short of invalidating all confidentiality instructions during the course of an internal investigation, it cautioned that a blanket prohibition will not pass muster. To survive a challenge the employer must show that prior to giving a confidentiality instruction it engaged in a case-specific analysis to determine whether (1) witnesses were in need of protection; (2) evidence was in danger of being destroyed; (3) testimony was in danger of being fabricated; and, (4) there was “a need to prevent a cover up.” Absent such factors, the NLRB will find the confidentiality instruction a violation of Section 7 of the NLRA.

Compliance with the Board’s startling ruling will no doubt have some unintended adverse consequences for internal investigations. Employers may lose the only ammunition they have to ensure that serious and sensitive allegations of misconduct do not become hot topics at the water cooler. Efforts by employers to protect i) alleged victims of harassment from retaliatory action by the accused or his supporters; or ii) alleged victims or falsely accused employees from defamatory workplace rumors may be severely undermined. Finally, unfiltered discussions among employees about ongoing investigations can undermine the integrity of an investigation and the employer’s good faith attempts to reach an unbiased, objective conclusion about the alleged misconduct. Unless the NLRB recognizes the short-sighted consequences of its latest ruling, employers seeking to protect the confidentiality of sensitive workplace investigations are in jeopardy of running afoul of employee rights under the NLRA.

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