Why it matters

Reversing an administrative law judge (ALJ), the National Labor Relations Board (NLRB) invalidated an employer's confidentiality policy pertaining to workplace investigations. When the company conducted internal investigations, the human resources employee worked from an "Interview of Complainant" form that included a request for those interviewed not to discuss the matter with their coworkers while the investigation continued. Interviews are confidential, the form explained, and interviewees were notified that attempts to influence the outcome of the investigation or retaliation against those who participated could be the basis of corrective action, up to termination. Although an ALJ found the employer had a legitimate business reason for using the form, a majority of the NLRB disagreed. "Employees have a Section 7 right to discuss discipline or ongoing disciplinary investigations involving themselves or coworkers," the panel wrote. "Such discussions are vital to employees' ability to aid one another in addressing employment terms and conditions with their employer." A dissenting member noted that no evidence had been submitted that the request "targeted, prevented or penalized specific [National Labor Relations Act]-protected concerted activity that actually occurred" or that "discipline was imposed based on disclosures involving actual protected concerted activity."

The decision establishes that employers may not use a "one size fits all" confidentiality policy and are required to conduct a case-by-case analysis to determine if such confidentiality provisions are appropriate for a specific investigation. An employer may only restrict discussions "where the employer shows that it has a legitimate and substantial business justification that outweighs employees' Section 7 rights," the panel said. This entails a case-specific inquiry into whether, for example, witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, or there is a need to prevent a cover up.

Detailed discussion

The National Labor Relations Board (NLRB) continued its streak of striking down employer policies when a majority of a three-member panel determined that a form used by Banner Health System ran afoul of Section 7 of the National Labor Relations Act (NLRA).

The case dates back several years, with an administrative law judge (ALJ) ruling in 2011 in favor of the employer. A previous decision from the NLRB was vacated by the U.S. Supreme Court's decision in NLRB v. Canning, so the panel considered the case de novo.

In addition to charges of NLRA violations relating to a technician at Banner Health, the decision focused on a charge that Banner's Human Resources Consultant JoAnn Odell unlawfully requested employees involved in workplace investigations not to discuss the matters with coworkers while the investigations were ongoing.

The requests were made pursuant to Banner's "Interview of Complainant" form, which featured a standard "Introduction for all Interviews" instructing HR employees to explain to employees that the interview was confidential. Employees were requested "not to discuss this with your coworkers while this investigation is going on," as "when people are talking it is difficult to do a fair investigation and separate facts from rumors."

The interviewer was also directed to inform the employee being interviewed that "[a]ny attempt to influence the outcome of the investigation … can be the basis for corrective action up to and including termination."

Odell testified that over the course of 13 months, she requested confidentiality in at least six investigations. She made the request based on the type of investigation, she explained, such as sexual harassment. Other "sensitive situations" including allegations of abuse or hostile work environment claims would also trigger her use of the form.

The requests did not violate Section 8(a)(1) of the NLRA, an ALJ determined, because the purpose of protecting the integrity of the investigation constituted a legitimate business justification for the confidentiality policy.

"That was error," a majority of the NLRB panel wrote. "Employees have a Section 7 right to discuss discipline or ongoing disciplinary investigations involving themselves or coworkers. Such discussions are vital to employees' ability to aid one another in addressing employment terms and conditions with their employer."

The court said this standard complies with earlier NLRB precedent in Hyundai America Shipping AgencyCaesar's Palace, and Phoenix Transit Systems. "[T]hose cases make clear that it is the employer's burden to justify a prohibition on employees discussing a particular ongoing investigation," the panel wrote, and demonstrated a two-fold process for employers.

"First, the employer must proceed on a case-by-case basis," the NLRB said. "The employer cannot reflexively impose confidentiality requirements in all cases or in all cases of a particular type," such as sexual harassment. "Second, a determination that confidentiality is necessary in a particular case must be based on objectively reasonable grounds for believing that the integrity of the investigation will be compromised without confidentiality."

These requirements are appropriate because "they fully and fairly accommodate the competing interests at stake: on one hand, employees' Section 7 right to discuss potential discipline (whether from the perspective of the employee facing possible discipline or from that of his coworkers) and, on the other hand, employers' legitimate need for confidentiality in certain circumstances to protect the integrity of their workplace investigations," the panel wrote. Placing the burden on the employer also made practical sense, the NLRB added, because it was in the best position to know whether confidentiality was necessary in a particular instance.

Applying the standard to Banner Health, the panel said the employer had not offered "any legitimate and substantial justification for Odell's requests to employees to keep investigations confidential." The employer's "generalized concern" was insufficient to outweigh employees' Section 7 rights, the NLRB said, as "Odell's own testimony establishes that she took a more categorical approach."

The fact that the form was used to make requests that lasted only as long as the investigation did not persuade the panel. "The investigative period—before [Banner Health] had reached any conclusions—would seem to be the period when employees likely would be most interested in, and most likely to benefit from, discussion with their coworkers and union representative," the panel said.

Banner Health must cease and desist from maintaining or enforcing its policy of requesting employees not to discuss ongoing investigations and rescind the policy, the majority ordered.

One member of the panel dissented, writing that the majority's decision "represents a disappointing extension of the Board's treatment of workplace investigations," adding that the standard would prove unworkable for employers. The dissent also noted that the Board "routinely imposes more onerous disclosure restrictions in its own investigations and hearings," adding that the decision was inappropriate because in the case at hand, no discipline was imposed and the request did not "target, prevent, or penalize specific NLRA-protected concerted activity that has actually occurred."

To read the decision in Banner Health System, click here.