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NLRB: Employers May Not Require Confidentiality In All Internal Investigations

[July 19, 2013]  The National Labor Relations Board (“NLRB” or “Board”) recently released an Advice Memorandum reiterating the Board’s position that an employer may not instruct employees to keep all workplace investigations confidential.  Rather, an employer may issue such a directive only if it can show that the circumstances surrounding a particular investigation justify a confidentiality instruction.

Background

Section 7 of the National Labor Relations Act (“NLRA”) gives employees (whether unionized or non-unionized) the right to engage in concerted activities for the purpose of mutual aid or protection.  Employees’ rights under Section 7 include the right to discuss disciplinary investigations involving fellow employees.  The Board and courts have long held that an employer violates Section 8(a)(1) of the NLRA if it maintains a work rule that would reasonably chill employees in the exercise of their Section 7 rights.

In its 2012 Banner Health decision, the NLRB held that an employer may instruct employees to keep an ongoing investigation confidential only if the employer can demonstrate a legitimate business justification for doing so that outweighs employees’ Section 7 rights to discuss the investigation.  In this regard, the Board held that an employer may not simply assert that all workplace investigations need to be kept confidential.  Rather, an employer must show the existence of one or more specific circumstances establishing a need for confidentiality in each individual case – i.e., a need to protect witnesses, avoid fabrication of testimony or destruction of evidence, or prevent a cover-up.

Board’s Advice Memorandum

The Board’s recent Advice Memorandum involved a paper company known as Verso Paper.  Verso Paper’s written Code of Conduct included the following language prohibiting employees from discussing ongoing investigations:

Verso has a compelling interest in protecting the integrity of its investigations.  In every investigation, Verso 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.  To assist Verso in achieving these objectives, we must maintain the investigation and our role in it in strict confidence.  If we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

An unfair labor practice charge challenging this policy was filed with an NLRB regional office, which referred the matter to the Board’s Division of Advice for guidance as to whether a formal complaint should issue.

In accord with the Board’s Banner Health decision, the Division of Advice concluded that the final two sentences of Verso Paper’s investigation policy were unlawfully overbroad.  The Division of Advice stated that “the Employer cannot maintain a blanket rule regarding the confidentiality of employee investigations, but must demonstrate its need for confidentiality on a case-by-case basis,” based on the factors identified by the Board in Banner Health i.e., whether witnesses need to be protected, evidence is in danger of being destroyed, testimony is in danger of being fabricated, or there is a need to prevent a cover-up.

Thus, the Division of Advice concluded that the Board should issue a formal complaint against Verso Paper.  (The case ultimately settled before a complaint was issued.)

Recommendations For Employers

In light of the Board’s Advice Memorandum and Banner Health decision, employers are advised to:

  • Review their policies and practices concerning workplace investigations, and, in consultation with counsel, revise them as necessary to ensure that the need for employee confidentiality in investigations is assessed on a case-by-case basis;
  • Confer with counsel before terminating or otherwise disciplining an employee for violating a confidentiality policy.  If the policy is overly broad, the proposed discipline could spark an unfair labor practice charge; and
  • Monitor further developments in this area.  In particular, it is likely that future Board decisions will help to clarify the circumstances in which the specific factors identified in Banner Health (e.g., a need to protect witnesses) will be found to justify prohibiting employees from discussing an ongoing investigation.

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Please contact us if you have any questions regarding the Board’s Advice Memorandum or any other issues relating to workplace investigations.  We regularly assist employers with labor relations matters, as well as with internal investigations, and we would be happy to assist you.