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Confidential Workplace Investigations Are Now Presumptively Lawful Under the National Labor Relations Act

January 3, 2020

In Apogee Retail LLC d/b/a Unique Thrift Store, 368 NLRB No. 144 (Dec. 16, 2019), the Board continued its reversal of Obama-era precedent by holding that work rules requiring employees to maintain confidentiality during workplace investigations are presumptively lawful. In so doing, the Board overruled Banner Estrella Medical Center, a decision issued during the Obama administration, which allowed employers to restrict discussion of workplace investigations only when the employer could prove that it had “legitimate and substantial business justifications” that outweighed employees’ Section 7 rights under the National Labor Relations Act (“NLRA”) to engage in concerted activity. For example, in Banner Estrella Medical Center an employer could not prohibit employees from speaking with each other to agree to contradict allegations being investigated by management. The ruling in Banner Estrella Medical Center affected all employers because NLRA Section 7 protections for “concerted protected activity” apply to substantially all private-sector employers, regardless of whether or not any of the company’s employees are represented by a labor union (however, executives, managers and supervisors are excluded from the protections of the NLRA).

The issue in Apogee was whether a facially neutral confidentiality rule unlawfully limited an employee’s NLRA Section 7 right to “engage in concerted activity for mutual aid or protection.” The Board majority found that such a rule did not violate Section 7 because employers have several legitimate justifications for insisting on employee confidentiality. Among other things, confidentiality contributes to a prompt investigation that can prevent further misconduct and protects complainants and witnesses from potential reprisal from coworkers who are involved in the misconduct under investigation. Finally, and particularly in cases that involve multiple perpetrators, confidentiality protects the integrity of the investigation by avoiding falsified defenses, destruction of evidence and other improper interference with management’s investigation of employees’ alleged misconduct.

Contrary to the dissent of one Board Member, the majority concluded that these justifications easily outweighed the “comparatively slight” impact on employees’ Section 7 rights because investigative confidentiality applies to a narrow subset of employee communications, i.e., information arising during an ongoing investigation. Employees are not broadly prohibited from discussing the employer’s disciplinary practices and policies, incidents that could lead to discipline, the incident at issue, or any other workplace issues generally. Rather, employees are required only to refrain from disclosing “what they say or hear during an investigative interview concerning [a specific disciplinary] incident.”

The NLRB also noted that its prior decision in Banner Estrella Medical Center was inconsistent with recommendations from the EEOC, which has strongly endorsed investigatory confidentiality of complaints of unlawful discrimination. Contrary to EEOC guidance, the NLRB had previously concluded that employers should take a “case-by-case approach” that created an unreasonable and unnecessary legal “dilemma faced by employers . . . caught between the two regulatory schemes.” Overruling Banner Estrella Medical Center has harmonized the “conflicting legal regimes under which employers operate regarding investigative confidentiality.”

Significance for Management and Next Steps

With this ruling, employers may once again institute work rules that require employees to maintain confidentiality about information shared or received during an ongoing, workplace investigation without risk of liability under the NLRA. Employers may only prohibit employees from discussing what they say or hear during the investigation, however, and may not prohibit discussions about anything they may have learned outside of the investigation about the underlying incident. Employers still cannot adopt strict confidentiality rules regarding post-investigation communications. Rather, after an investigation has been completed, the employer must determine - on a case-by-case basis - whether an employee’s Section 7 rights are properly outweighed by further confidentiality justifications.

Please do not hesitate to contact any of our attorneys if you have any questions regarding this issue or would like assistance reviewing and updating your company’s confidentiality policies.