Most employment lawyers have been trained to advise employees to refrain from talking to their co-workers about a workplace investigation during the pendency of the investigation. The best witness testimony is that which is raw, uncensored and unrehearsed. A conscientious investigator not only wants to guard against collusion among witnesses but also the tendency to have one’s own recollection of events be influenced by listening to others.
The well-publicized July 30, 2012, decision by the National Labor Relations Board (NLRB) in Banner Health System d/b/a Banner Estrella Medical Center and James A. Navarro Case 28-CA-023438 made what had become perfunctory admonitions regarding confidentiality a thing of the past. In Banner, the NLRB held that covered employers were prohibited from maintaining blanket confidentiality policies in connection with workplace investigations. Specifically, the NLRB found that the employer’s human resources consultant, who routinely asked employees making a complaint not to discuss the matter with their co-workers while the employer’s investigation was ongoing, violated Section 8 (a)(1) of the National Labor Relations Act. The NLRB explained that to justify a prohibition on employee discussion of ongoing investigations, an employer must show that it has a legitimate business justification that outweighs employees’ Section 7 rights.
The term “Section 7 rights” references concerted activity (employees joining together to go to the employer or just talking about doing something). With the decline of unionized work forces in the private sector, there has been a shift in focus by the NLRB to Section 7 rights. Consequently, there have been more work rule cases from the NLRB that focus on what employers can and cannot do. In determining whether a work rule violates Section 8(a)(1), the inquiry is whether the rule would reasonably tend to pacify employees in the exercise of Section 7 rights. Banner is one such case.
The NLRB in Banner identified the following factors as those that need to be considered when determining whether an employer has a substantial business justification to prohibit discussion among co-workers regarding an ongoing investigation:
- Do witnesses need protection?
- Is evidence in danger of being destroyed?
- Is testimony in danger of being fabricated?
- Is there a need to protect a cover up?
Then, on January 25, 2013, the buzz about Banner resurfaced when a three-judge panel of the Federal Appeals Court in Washington, D.C. (in Noel Canning v. NLRB), ruled that President Obama’s recess appointments to the NLRB were unconstitutional. If the decision is appealed to the Supreme Court and then upheld, some speculate that all of the decisions reached by the NLRB since January 2012 (including Banner) could be invalid. The NLRB, on the other hand, “respectfully disagrees” with the decision and takes the position that “this order applies to only one case, Noel Canning, and that similar questions have been raised in more than a dozen cases pending in other courts of appeals.”
While Banner got a lot of attention, the core holding was not precedential. Although the NLRB precisely delineated the four-factor analysis for the first time in Banner, it was not the first time the NLRB had prohibited a blanket confidentiality policy as violative of Section 7 rights. It was also not the first time the NLRB recognized that there were times when confidentiality rules were justified.
In 2001, in the case of Desert Palace, Inc. d/b/a Caesar’s Palace and Richard Zollo, Case 28-CA-14240, the NLRB declared it lawful for the employer to demand confidentiality during its investigation regarding drugs at the workplace. The NLRB agreed that in an investigation involving allegations of a management cover-up, possible management retaliation and threats of violence, a confidentiality rule was necessary to ensure witnesses were not put in danger, evidence was not destroyed and testimony was not fabricated.
On the flip side, in the 2002 case of Phoenix Transit System and Amalgamated Transit Union, Local Union No. 1433, AFL-CIO, Case 28-CA-15177, the NLRB held the employer failed to establish a legitimate and substantial justification for its confidentiality rule prohibiting employees from discussing their sexual harassment complaints among themselves.
Similarly, on August 26, 2011, in the case of Hyundai America Shipping Agency, Inc. and Sandra L. McCullough Case 28–CA–22892, the NLRB held that the employer was prohibited from maintaining or enforcing an oral rule prohibiting employees from discussing with other people any matters under investigation by its human resources department because it had not met its burden to establish a legitimate and substantial justification for doing so. The Hyundai case is currently pending review in the D.C. Circuit. Interestingly, Hyundai’s attorney argued that it should be able to raise the Noel Canning ruling in its case even though it concerns a different board member appointed during a recess in 2010. It remains to be seen as to whether the Noel Canning ruling will impact the ruling in Hyundai.
Regardless of the ultimate outcome of Noel Canning, Banner and Hyundai, the fundamental rule prohibiting blanket confidentiality policies in the absence of a legitimate and substantial business as set forth in Caesar’s Place and Phoenix Transit System should not be affected.
What Does This Mean for Employers?
An employer within the jurisdiction of the NLRB may not maintain a blanket policy prohibiting discussion among employees regarding the investigation. Instead, the first step in determining the appropriate instruction regarding confidentiality in a particular investigation should be to determine if the NLRB has jurisdiction over the employer in general and the employees who are being interviewed in particular. If so, then the employer, with the advice of their counsel, should analyze the four Banner factors to determine if any facts justify an individualized instruction regarding confidentiality. Documentation of this analysis is advisable.
There has not yet been a case before the NLRB where an employer has formulated an admonition regarding confidentiality as a result of analysis specifically set forth by Banner. Since the four factors are stated in the alternative, it would arguably be enough to satisfy just one in order to meet the burden of proof required to justify a confidentiality rule in an ongoing investigation. However, it is not known if the NLRB gives equal weight to all factors or what types of facts would be a valid level of concern for each factor.
Naturally, employment attorneys must balance this approach against the EEOC’s guidance regarding keeping allegations of harassment as confidential as possible. However, there are signs that the EEOC may share concerns similar to the NLRB with regard to how a broad confidentiality policy could act as a deterrent to an employee filing harassment claims with the EEOC.
The reality is that the four Banner factors identify the most common concerns an employer has regarding employee communications around an investigation. It likely won’t be difficult for employers to satisfy at least one of the factors. Consequently, the net effect of Banner is not a prohibition against confidentiality, but rather, a prohibition against blanket confidentiality policies that could also be viewed as problematic by the EEOC.
This certainly is not the last word from the NLRB or the EEOC on confidentiality in investigations, so stay tuned!
Michelle Regalia McGrath is an attorney who devotes her practice to conducting workplace investigations (www.mcgrathinvestigations.com).
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