Nlrb Approves Of Confidentiality In Workplace Investigations

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Nlrb Approves Of Confidentiality In Workplace Investigations

By: Vanessa Lystad, Vogel Law Firm

For several years, employers have been burdened with a conflicting standard from the National Labor Relations Board (“NLRB”) and guidance from the Equal Employment Opportunity Commission (“EEOC”) with respect to confidentiality of workplace investigations. On the one hand, the NLRB-in a decision called Banner Estrella Medical Center issued in 2015-adopted a standard that an employee’s rights under Section 7 of the National Labor Relations Act (“NLRA”), which include discussing terms and conditions of employment with other employees, predominates and an employer maintains the burden to establish that its interests in conducting a confidential workplace investigation outweigh the employee’s interests in exercising Section 7 rights. On the other hand, the EEOC endorses blanket rules requiring confidentiality during investigations and advocates that employers should adopt such rules to protect those involved. Employers can now breathe a sigh of relief, as the NLRB has recently overruled the standard in Banner, holding that work rules requiring confidentiality during the course of workplace investigations are presumptively valid.

Banner Overruled and Replaced

In Banner, the NLRB indicated that employees have a Section 7 right to discuss discipline or ongoing disciplinary investigations involving themselves or co-workers. Therefore, according to the NLRB in Banner, an employer may restrict those discussions only when the employer shows that it has a legitimate and substantial business justification that outweighs employees’ Section 7 rights. This standard effectively placed a heavy burden on the employer.

In a new case called Apogee Retail LLC d/b/a Unique Thrift Store, the NLRB found that the standard in Banner abandoned prior Supreme Court precedent that requires the NLRB to balance employee and employer interests. The NLRB also noted that the standard in Banner was inconsistent with EEOC guidance and recommendations. As a result, the NLRB held that the appropriate test to apply when reviewing investigation confidentiality rules is to evaluate (1) the nature and extent of the potential impact of the rule on NLRA rights and (2) the legitimate justifications associated with the rule. After conducting this analysis, rules will fall into one of three categories:

  • Category 1 are rules that are lawful because they either (i) do not prohibit or interfere with the exercise of NLRA rights or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule.
  • Category 2 are rules that warrant individualized scrutiny in each case as to whether the rules would prohibit or interfere with NLRA rights and, if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.
  • Category 3 are rules that are unlawful because they prohibit or limit NLRA-protected conduct and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.

This test was originally formulated by the NLRB in 2017 in Boeing Co. with respect to facially neutral workplace rules, and the NLRB found it appropriate to replace the Banner standard with the Boeing test.

Applying the Boeing Test

In applying this test, the NLRB determined that facially neutral investigative confidentiality rules may affect the exercise of Section 7 rights, but any adverse impact is comparative slight and is outweighed by the substantial and important justifications associated with the maintenance of the rules, particularly with respect to open investigations. Accordingly, investigative confidentiality rules fall under Boeing‘s Category 1 (and are presumptively valid) to the extent they are limited to open investigations.

Notably, the rules at issue were silent with regard to the duration of confidentiality. While the NLRB recognized that there may be substantial reasons for extending a confidentiality requirement beyond the end of an investigation, it found that rules not limited on their face to open investigations fall into Boeing‘s Category 2, requiring individualized scrutiny. The case was remanded for further consideration as to whether the rules passed muster under Category 2.

Take Away for Employers

In light of this new NLRB decision, employers should review (and possibly revise) their handbooks and workplace investigation policies or rules. Policies requiring confidentiality during open investigations will be presumptively lawful. If the policies are silent as to the duration of confidentiality or expressly extend post-investigation, they may or may not be lawful, and employers will need to be prepared to articulate their justifications for having such rules in place.

Vanessa Lystad
Vogel Law Firm
Fargo, North Dakota

The author may be reached at [email protected] or 701-237-6983.