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Employer Law Report

NLRB Issues Advice Memorandum Weighing In On Confidentiality of Employer Investigations

Posted in Labor Relations

Back in August, we alerted you to an NLRB decision in Banner Health System dba Banner Estrella Medical Center and James A. Navarro, Case No. 28-CA-023438, in which the Board held that an employer’s blanket rule requiring employees to maintain the confidentiality of pending internal company investigations violated the employees’ Section 7 right to discuss discipline or disciplinary investigations involving their fellow employees. At the time, we expressed the concern that the NLRB’s position complicates an employer’s ability to protect the integrity of an ongoing investigation. Nevertheless, at the time, we recommended that employers should treat each investigation on an individualized basis and that employers should document its specific business rationale for requesting employee confidentiality during an investigation.

Last week, the NLRB’s Division of Advice issued a Memorandum revisiting this issue. In Verso Paper, NLRB Div. of Advice, No. 30-CA-89350, 1/29/13 [released 4/16/13] Associate General Counsel Barry J. Kearney advised that the employer maintained an overbroad rule requiring employee confidentiality to maintain the integrity of all internal investigations. The company’s Code of Conduct specifically provided:

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.

Reviewing this policy, Mr. Kearney reiterated the Board’s position from Banner Health that an employer must show more than a generalized concern with protecting the integrity of its investigations. “Rather, an employer must ‘determine whether in any give[n] investigation witnesses need[ed] protection, evidence [was] in danger of being destroyed, testimony [was] in danger of being fabricated, and there [was] a need to prevent a cover up." Thus, according to Kearney, a blanket rule prohibiting employee discussions of ongoing investigations is unlawful because it does not require the employer first to demonstrate a particularized need for confidentiality in any given situation. He therefore advised the NLRB’s Region 30 Director to issue a complaint against the employer in the absence of settlement.

In a footnote to his Memorandum, Mr. Kearney provided employers with a safe harbor policy that would avoid the potential Section 7 pitfalls. Specifically, he noted that the first two sentences of the employer’s rule lawfully set forth a legitimate interest in protecting the integrity of its investigations and then recommended modifying the remainder of the rule to lawfully advise employees that:

Verso may decide in some circumstances that in order to achieve these objectives, we must maintain the investigation and our role in it in strict confidence. If Verso reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

It is easy for employers to make any necessary changes to its policies. In addition, there is not a lot of gray area in the Board’s position as there was with respect to social media policies. Therefore, it is unlikely that we will see any actual litigation arising out of the Verso complaint if it gets issued or regarding any other similar company policies. As we previously pointed out, however, it is hard to imagine many, if any, internal investigations that could not be thwarted by the loose lips of co-workers. As a result, I expect that the next significant clash on this issue that goes before the Board will address actual employee discipline cases. When that happens, we will see how far the Board is willing to go to protect employees who interfere with their employer’s internal investigations.