Over the past year, two categories of common workplace confidentiality policies have come under scrutiny from the National Labor Relations Board (NLRB): (1) confidential investigation policies and (2) confidential/proprietary information policies. Like many recent NLRB decisions, the focus of the inquiry into these policies is on whether they affect employees’ rights under Section 7 of the National Labor Relations Act (NLRA) to engage in “concerted activities” for mutual aid or protection.
Confidential Investigation Policies
Confidential investigation policies typically direct employees who participate in internal investigations to refrain from discussing the investigation with other employees. These policies are often motivated by the desire to protect the integrity of investigations and safeguard employees from retaliation. Despite these legitimate motives, recent decisions have underscored the peril of relying on a blanket policy requiring confidentiality in every investigation.
One year ago, we published a Workplace Word installment alerting employers to a controversial NLRB board decision commonly referred to as Banner Health. In this decision, the Board asserted that “[t]o justify a prohibition on employee discussion of on-going investigations, an employer must show that it has a legitimate business justification that outweighs employees’ Section 7 rights.” In the intervening year, the NLRB has provided further guidance for employers, but the general policy announced in Banner Health has been reaffirmed.
In January, the NLRB’s Office of General Counsel issued an Advice Memorandum to Verso Paper reaffirming the Banner Health rule, but endorsing safe-harbor language for confidential investigation policies. The memorandum suggested that the following code of conduct provision would be consistent with Banner Health:
[Employer] has a compelling interest in protecting the integrity of its investigations. In every investigation, [Employer] has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up .... [Employer] may decide in some circumstances that in order to achieve these objectives, [an Employee] must maintain the investigation and [his/her] role in it in strict confidence. If [Employer] reasonably imposes such a requirement and [an Employee] do[es] not maintain such confidentiality, [the employee] may be subject to disciplinary action up to and including immediate termination.
Since that guidance was issued, an NLRB judge struck down a revised version of a Boeing policy that merely “recommend[ed]” that employees refrain from discussing investigations. The NLRB judge concluded that even a “recommendation” would have a chilling effect on concerted activity by employees. Specifically the judge cited the concern that the policy clearly communicated Boeing’s desire for confidentiality without giving employees any assurance that they are free to disregard the recommendation.
As a result of these decisions, continued reliance on blanket confidential investigations policies may invite NLRB attention. If an employer intends to impose a confidentiality requirement for a particular investigation, it should engage in an individualized, well-documented analysis of the business justification and consult employment counsel to ensure compliance with this continually developing body of law.
Confidential Information Policies
In addition to taking aim at overbroad confidential investigation policies, the NLRB has also struck down general confidential information policies designed to protect proprietary information and intellectual property. Many companies may not even be aware that their efforts to protect non-investigatory confidential information can implicate the NLRA, but two recent cases have highlighted the fact that the Board’s attention is fixed on this issue.
The NLRB has long-held that employees have a Section 7 right to discuss wages and terms and conditions of employment with both co-workers and outside individuals. Consequently, any policies that prohibit employees from disclosing confidential information but fail to define “confidential information” in a manner that excludes information regarding wages, benefits and other working conditions are likely to raise a red flag for the Board.
In June, two different decisions confirmed that the NLRB will strike down overly broad confidential information policies. In the first decision, an NLRB judge recently struck down an American Red Cross policy that prohibited employees from disclosing confidential information relating to “personnel” and “employees.” The judge held that the policy “would be reasonably understood by employees to prohibit the disclosure of information including wages and terms of conditions of employment.” The employer’s decision to include a disclaimer provision, which stated that the policy “does not deny any rights provided under the National Labor Relations Act to engage in concerted activity,” did not redeem the otherwise unlawful policy.
Less than two weeks later, the NLRB affirmed an Administrative Law Judge’s decision, requiring Quicken Loans to rescind a confidential information policy that defined confidential information as “non-public information relating to ... the Company’s business, personnel ... all personnel lists, personal information of co-workers ... personnel information such as home phone numbers, cell phone numbers, addresses and email addresses.” The Board upheld the finding that such a policy substantially curtails Section 7 rights by prohibiting the discussion of wages and benefits amongst employees.
In order to avoid the cost, inconvenience and negative publicity of an NLRB claim, employers should consider steps to narrowly tailor their confidential information definitions, at least as they relate to employee and personnel information. Given the sensitive business interests at risk, companies often favor expansive definitions of confidential information in their policies and agreements, but this desire should be tempered by a sensitivity to Section 7 rights.
The NLRB’s heightened focus on these issues exemplifies the vigorous enforcement of Section 7 rights that has been a hallmark of the current Board. There is no reason to believe that the current Board will reverse course, so employers should continue to be mindful of the Section 7 implications of seemingly run-of-the-mill policies.