Kimberly Atkins, The Daily Record Newswire
A recent National Labor Relations Board ruling holding that a company committed an unfair labor practice by requiring employees to agree to keep internal investigation interviews confidential is sending employers scrambling to change their policies.
Employment defense lawyers say the decision hamstrings companies’ efforts to conduct internal investigations when they receive complaints about misconduct ranging from sexual harassment to workplace safety violations, even when those investigations are required under state and federal laws.
According to the ruling, to justify keeping an investigation confidential, the employer “must show that it has a legitimate business justification that outweighs employees’ Section 7 rights.”
Further, an employer’s “generalized concern with protecting the integrity of its investigations is insufficient to outweigh employees’ Section 7 rights.”
What this does, said Stephen W. Lyman, founding member of the firm Hall, Render, Killian, Heath & Lyman in Indianapolis, is “place a high burden on the employer to justify that confidentiality is required in each instance. That is a burden that is new for most employers.”
But plaintiffs’ lawyers say the ruling is necessary to protect the rights of workers.
“The concern is that these confidentiality clauses are being used as a hammer to prevent concerted activity,” said Donna M. Ballman, an employment attorney in Ft. Lauderdale, Fla., and author of the upcoming book “Stand Up For Yourself Without Getting Fired.” “Employees should be able to talk about dangerous working conditions. They should be able to talk about illegal practices.”
Confidentiality must be justified
In Banner Health Systems and Navarro, the Board held 2-1 that a company had violated the National Labor Relations Act by requesting confidentiality from all employees as a matter of course during internal investigations.
The case involved a technician at a Phoenix hospital who alleged retaliatory treatment after complaining of poor and unsafe working conditions. Before being questioned by human resources officials, the technician was asked not to discuss the matter with co-workers during the course of the investigation. This practice was followed whenever an employee made a complaint.
The worker later claimed that the confidentiality agreement violated the NLRA because it could reasonably lead employees to believe that they were prohibited from engaging in concerted activity.
The administrative law judge hearing the case found no violation of the Act.
But the NLRB disagreed. Such confidentiality requirements, the Board ruled, unlawfully chill employees’ right under Section 7 of the Act to communicate with co-workers about their wages, hours, and other terms and conditions of employment.
A prohibition on discussing investigations is acceptable only if there is a “legitimate business justification” for the policy, and a “generalized concern with protecting the integrity” of an investigation is not sufficient to meet that threshold, the Board held.
Instead, the burden rests with an employer to first determine and later be able to prove that the requested confidentiality is necessary for one of four reasons: To protect a witness, to stop evidence from being destroyed, to avert fabricated testimony or to prevent a cover up.
Change in practice
Employer-side lawyers are moving quickly to inform their clients about the ruling and urge them to evaluate their internal investigation practices so they are not caught by surprise by unfair labor practice allegations.
To avoid problems, employers should stay away from a blanket practice of requiring confidentiality during all internal investigations. Instead, companies should request secrecy only in situations that fall within one of the NLRB’s four categories — and make sure they can prove the investigation falls within the exception.
That may require companies to think in an entirely different way.
“Some employers, particularly smaller ones, may say, ‘Wow, I didn’t realize that. I wasn’t trying to coerce anybody,’” Lyman said.
Some attorneys suggest that this ruling, combined with other recent actions by the Board, demonstrates an aggressive enforcement policy against employers.
“The Board is taking action in a different way than they have in the past,” said Martha J. Zackin, of counsel in the Boston office of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo.
Until now, requiring employees to keep details of internal investigations confidential — whether done by verbal request or written agreement — has been a “basic tenet of internal investigations,” protecting both employers’ fact-finding ability as well as employees’ privacy, Zackin said.
“If witnesses are talking to other witnesses, how can you maintain the integrity of the investigation?” she said.
If employers must wait until they have evidence that one of the enumerated reasons for confidentiality is present, it may be too late.
“I don’t think you can know before you start whether the integrity of the investigation can be maintained without confidentiality,” Zackin said. “When you interview two witnesses, and their stories are absolutely identical, then you know that they talked.”
But Ballman said that the ruling simply enforces Section 7 rights that have long existed, and leaves plenty of room for protecting information that ought to remain secret.
For example, employers can ask for confidentiality if a sexual harassment complaint has been made and the complainant would be easily identifiable.
“That is a legitimate reason,” said Ballman. “But how does putting a gag order on someone who is complaining about working conditions help employers conduct an investigation?”
Lyman said the ruling doesn’t give employers enough guidance to determine how much evidence is enough to support the use of confidentiality pacts.
“My concern is even if the employer is able to articulate one of the four reasons, the NLRB can still come back and say, ‘That wasn’t good enough,’” Lyman said. “It’s always a moving target.”
