Over the past several weeks the National Labor Relations Board (the “Board”) has come down with a series of decisions that attack the very fabric of the employee-employer relationship: at-will employment.  Then, in nothing short of a Las Vegas-style double or nothing gambit, the Board did not stop there, but instead doubled down on their offensive against employers by rendering unlawful the confidentiality requirements (pdf) that many health care employers follow in internal investigations.

Almost every employer have a provision in its employee handbook explaining that employees are employed on an at-will basis, meaning that either the employee or the company may terminate the employment relationship at any time with or without notice and for any or no reason.  To ensure that the at-will employment relationship is not altered through unintended or unauthorized comments to an employee by a rogue manager, employers typically include language in their handbooks stating that the at-will relationship cannot be altered or modified without the express written approval of a designated corporate representative, such as the president or another senior level executive.  In a string of recent cases, the Board has taken the position that such  ”cannot be altered or modified” disclaimer language is an unlawful violation of Section 7 of the National Labor Relations Act (the “Act”).  Section 7 of the Act gives employees the right to engage in protected concerted activity for the purpose of improving their wages, hours, or working conditions.  According to the Board, this language chills the exercise of Section 7 rights because forming a union would be futile in that the employer would not agree to  a collective bargaining agreement containing limitations on the at-will employment, such as a “just cause” standard and because such senior level executives are rarely available to participate in collective bargaining or to sigh collective bargaining agreements. While the Board has indicated that it is not holding that at-will language is per se unlawful and violative of the Act, it has made clear that such clauses will be read closely on a case by case basis.

In a separate decision, the Board also challenged a health care company’s practice of requiring all employees who participate in an internal investigation to keep the contents of the investigation confidential and not disclose it to or discuss it with other employees.  The Board ruled that a uniform policy of requiring confidentiality violates the employees’ right to engage in concerted activity under Section 7 of the Act because it prevents them from talking to one another about problems in the workplace.  Instead, an employer may only require confidentiality if it has a legitimate and specific reason for the requirement, as examined on a case-by-case basis.  The Board explained in this decision that the factors that may permit an employer to impose a requirement of confidentiality are the following:

  • the need to protect witnesses;
  • a likelihood that evidence may otherwise be destroyed;
  • the threat that subsequent testimony would be fabricated;
  • or the need to prevent a cover-up.

One additional challenge for employers is that the Board’s decision flies in the face of guidance previously issued by the EEOC that investigations should be kept confidential to the extent possible, especially if an employer is hoping to take an advantage of the Farragher-Ellerth affirmative defense in harassment cases.

These decisions should be viewed as part of a broader overall plan by the Board to make itself relevant to non-union workforces.  Unless the composition of the Board changes with a new administration, we expect the Board to continue to target the policies of non-union employers in the months ahead.  In the meantime, employers should review their policies and employee handbooks in conjunction with counsel to ensure that they are narrowly tailored so as to withstand the scrutiny of the Board.  In addition, employers should consult with counsel before disciplining or terminating an employee for violating of any of these policies.