In one of its final decisions of 2012, the National Labor Relations Board (“NLRB” or “the Board”) replaced a 34-year old bright-line rule with a balancing test that may hinder workplace misconduct investigations. Previously, an employer was not required to provide confidential witness statements to a union official acting as the collectivebargaining representative for an aggrieved employee, but now these statements must be released unless the employer can establish that its interest in confidentiality outweighs the union’s need for information in its representation of the employee.

Background on Witness Disclosure Requirements. The National Labor Relations Act (“Act”) requires employers to provide a union representative with relevant information to assist in the processing of employee grievances. In 1978, the NLRB established a clear exception to this general rule in Anheuser-Busch Inc., 237 NLRB 982 (1978), explaining that witness statements made by fellow employees under assurances of confidentiality are “fundamentally different” from the other types of information generally provided due to the potential for witness coercion and intimidation prior to arbitration hearings and due to the potential chilling effect on workplace investigations that would flow from disclosing statements assured to be confidential when solicited from the cooperating employees. An employer is generally required to reveal the names and job titles of witnesses (Transport of New Jersey, 233 NLRB 694 (1977)), although the employer may assert that it has a legitimate and substantial confidentiality interest in this information that outweighs the union’s need to collect relevant information. This balancing test was established by the U.S. Supreme Court in Detroit Edison Co. v. NLRB, 440 U.S. 301 (1979), and applies to instances where the employer seeks to protect information that it deems to be confidential from the union. When an employer refuses to produce information on confidentiality grounds, it has an obligation to seek an accommodation to satisfy the union’s needs. Pennsylvania Power, 301 NLRB 1104 (1991).

A Dramatic Change of Course. The NLRB changed its course in American Baptist Homes of the West d/b/a Piedmont Gardens, 359 NLRB No. 46 (2012) (“Piedmont Gardens”). The employer, a continuing- care facility, investigated a report from a co-worker that a certified nursing assistant (CNA) had been sleeping while on duty. The reporting co-worker was assured that her written statement would remain confidential and additional statements were taken from two other employees: one was expressly assured her statement was confidential but the other did not receive such assurances and merely assumed her statement would be confidential. After terminating the CNA, the employer refused to provide the CNA’s union representative with copies of the witness statements, relying upon the NLRB’s precedent in Anheuser-Busch. The employer also declined to provide the witnesses’ names and job titles, asserting confidentiality concerns.

An administrative law judge ruled that the employer violated the National Labor Relations Act because it did not establish a sufficient confidentiality interest in the witnesses’ names and job titles, but also found that the employer was not required to disclose any of the witness statements in accordance with the long-standing precedent of Anheuser-Busch. Counsel for the union sought review from the NLRB urging it to replace the bright-line Anheuser-Busch exception with the balancing test articulated by the U.S. Supreme Court in Detroit Edison, and further arguing that the statement of the witness who was not promised confidentiality was not protected by the Anheuser- Busch exception at all. The employer disputed the judge’s findings on the witnesses’ names and job titles, and urged the NLRB to extend the Anheuser-Busch exception to protect the names of witnesses as well as their statements.

In a 3-1 decision, the Board overruled its Anheuser-Busch decision citing several reasons for replacing the bright-line rule with the Detroit Edison balancing test for confidential information. First, the current NLRB disagreed that witness statements are so fundamentally different from other types of information to justify a blanket rule excluding them. The Board reasoned that requiring disclosure absent a showing of a legitimate and substantial confidentiality concern protects sensitive information while also supporting the Board’s long-standing policy favoring disclosure, collective bargaining, and private resolution of disputes. Additionally, the NLRB reasoned the same risks of witness intimidation and reluctance to provide statements absent promises of confidentiality arise from disclosure of the witnesses’ names and job titles, which must be provided absent proof of a superior confidentiality concern under the Detroit Edison balancing test. The NLRB did recognize that this departure from well-established precedent would create a “manifest injustice” to employers who have come to rely upon the clear Anheuser-Busch exception; therefore, the new Detroit Edison balancing test will only apply prospectively – that is, where the employer’s refusal to provide witness statements occurs after December 15, 2012. As a result, the Board found that the employer in Piedmont Gardens was justified in withholding the two witness statements provided with assurances of confidentiality. The statement provided by the witness who was not given any assurances of confidentiality and merely assumed her statement would be confidential was not protected by the Anheuser-Busch exception; therefore, the NLRB concluded that the employer violated the Act by not disclosing her statement to the union representative.

The Practical Implications. As noted by departing NLRB Member Brian Hayes, who dissented from the Piedmont Gardens decision, “this test substitutes doubt for certainty,” and such uncertainty may create obstacles to workplace investigations and the prompt resolution of grievances. Now employers will be unable to promise employees upfront that their statements in workplace investigations will remain confidential because the disclosure determination must be made later in the process, after the statements are created. Without assurances of confidentiality, employees may be reluctant to come forward and may be less forthcoming in the statements they do provide.

In addition to the general chilling effect this may have on employee participation in all workplace investigations, this poses a potential conflict with the Equal Employment Opportunity Commission’s (“EEOC”) “Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors,” which directs that an antiharassment policy and complaint procedure should contain “assurances that the employer will protect the confidentiality of harassment complaints to the extent possible.” These types of “assurances” to employees are rather empty in light of the Piedmont Gardens decision.

The rule change complicates the investigation and grievance resolution process every step of the way. Without upfront assurances that their statements will be kept confidential, employees may be reluctant to cooperate in investigations of workplace misconduct. Because witness statements now must be disclosed unless the employer refuses on confidentiality grounds, union officials have every reason to request them in every grievance investigation. If the employer does not wish to disclose the witness statements, then the employer must attempt to predict whether an administrative law judge would find the employer’s interest in confidentiality superior to the union’s need for relevant information. If the employer refuses to produce the statements on confidentiality grounds and the union insists it is entitled to the statements, the union may file an unfair labor practice charge to obtain a ruling on the Detroit Edison balancing test from a judge, which will lengthen the grievance process and ultimately delay resolution. Additionally, because the Detroit Edison balancing test requires a fact-specific analysis, each case must be analyzed on its own facts and circumstances and will provide little or no guidance for future cases.

Looking Forward. While there are legitimate concerns surrounding the sudden change of course by the NLRB, employers can adapt their investigations to the new parameters of the Detroit Edison test. Because the employer can no longer assure absolute confidentiality when gathering witness statements, employers may be wise to modify how they express an offer of confidentiality by explaining that the employer will do its best to keep statements confidential but may be required by law to disclose the statement or a summary thereof. Employers can anticipate more requests from union representatives for witness statements and may find it necessary to modify the manner in which the employer collects these statements or the types of information provided in the statements, knowing that the statements must generally be released. Employers should also be aware that raising confidentiality concerns in response to a union representative’s request for witness statements may lead to an unfair labor practice charge and delays in the grievance resolution process. While speculative and generalized fears of witness coercion or intimidation are unlikely to establish a legitimate and substantial confidentiality interest under the Detroit Edison balancing test, employers should be sensitive to facts and circumstances that create increased threats of witness coercion or intimidation and should be prepared to articulate these concerns to overcome the union’s need for relevant information.

This transition from clarity into uncertainty will require an adjustment, but with the guidance of experienced legal counsel, employers can navigate the Piedmont Gardens rule change with confidence.