NLRB upholds employers’ right to require employee confidentiality regarding ongoing workplace investigations


confidential folder

On December 17, 2019, the National Labor Relations Board (NLRB) issued an important decision holding that employers do not violate the National Labor Relations Act (NLRA) when they prohibit employees from discussing confidential workplace investigations. In Apogee Retail, the employer maintained policies stating that employees involved in workplace investigations were “expected to maintain confidentiality regarding these investigations” and prohibited “unauthorized discussion of [the] investigation or interview with other team members.”

The NLRB turned to its prior decision in Banner Estrella in analyzing whether these rules infringed on an employee’s rights to discuss the terms and conditions of employment under Section 7 of the NLRA. The NLRB previously held in Banner Estrella that employees have a Section 7 right to discuss discipline or ongoing disciplinary investigations involving coworkers and, therefore, an employer can restrict those discussions only when the employer shows that it has a legitimate and substantial business justification that outweighs employees’ Section 7 rights. In so holding, the NLRB previously placed the burden on the employer to determine, on a case-by-case basis, whether its interests in preserving the integrity of an investigation outweighed presumptive employee Section 7 rights.

The current NLRB disagreed with this reasoning and overruled the decision in Banner Estrella because it failed to recognize and weigh the important interest of employers in providing, and of their employees in receiving, assurances that reports of incidents of misconduct or other workplace dangers will be held in the strictest confidence. The NLRB further reasoned that its own investigative procedures recognized the need for investigative confidentiality and that other federal agencies, such as the EEOC and OSHA, also require confidentiality during their investigations of alleged wrongdoing for reasons of employee privacy and to maintain the integrity of the investigation.

Instead of relying on Banner Estrella, the NLRB looked to its Boeing decision, which contains a standard for determining whether facially neutral work rules violate the NLRA. Under Boeing, the NLRB has the burden to evaluate (1) the nature and extent of the potential impact of the rule on NLRA rights and (2) legitimate justifications associated with the rule. After conducting this analysis, the NLRB places the rule into three categories:

  • Category 1: Rules that the NLRB designates as lawful because they do not prohibit or interfere with the exercise of NLRA rights or the potential adverse impact on protected rights is outweighed by legitimate justifications.
  • Category 2: Rules that warrant individualized scrutiny in each case as to whether the rule interferes with NLRA rights and, if so, whether any adverse impact is outweighed by legitimate justifications.
  • Category 3: Rules designated as unlawful because they prohibit or limit NLRA-protected conduct and the adverse impact is not outweighed by justifications associated with the rule.

With Boeing’s standard as its framework, the NLRB held that investigative confidentiality rules as applied to open investigations fall under Category 1 because, while they may affect the exercise of Section 7 rights, any adverse impact is comparatively slight. The NLRB reasoned that the rules at issue did not broadly prohibit employees from discussing either discipline or incidents that could result in discipline. Instead, the rules narrowly prohibit employees from discussing investigations of such incidents or related interviews.

The NLRB further reasoned that the employer in Apogee Retail provided substantial and compelling justifications for its policies, such as preventing theft; responding quickly to misconduct through prompt investigations; protecting employee privacy; ensuring that there will be no retaliation by managers or other employees; and safeguarding the integrity of an investigation for both employers and employees.

The NLRB, however, concluded that investigative confidentiality rules that are not expressly limited to ongoing and open investigations may be subject to higher scrutiny (Category 2) by the NLRB and may require additional legitimate business justifications. The NLRB concluded that employees could reasonably interpret a rule that is silent with regard to the duration of the confidentiality requirement to encompass any investigation, including closed investigations.

The NLRB’s decision in Apogee Retail presents a significant win for employers as it allows employers to maintain rules regarding the confidentiality of workplace investigations. Employers should review their policies to ensure that their provisions reflect this change. However, they must ensure that such policies are specifically limited to open or ongoing investigations in order to prevent higher scrutiny by the NLRB.

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