Do you instruct or ask employee witnesses to keep the subject matter of a workplace investigation and your interview confidential when you conduct an investigation? Are there consequences for employees who breach confidentiality? For years, HR professionals regularly have given those instructions and been trained by experienced investigators and the Equal Employment Opportunity Commission (EEOC) to do so―and for good reason. But have you ever really thought about when and why you give those instructions?
The National Labor Relations Board (NLRB) recently held that a “blanket approach” requiring confidentiality during an investigation violates employees’ concerted activity rights under Section 7 of the National Labor Relations Act (NLRA). According to the NLRB, for each investigation, you must carefully consider whether a confidentiality requirement truly is warranted or unfairly impinges on employees’ Section 7 rights. Regrettably, the NLRB’s brief analysis and ruling are, at best, unclear and, at worst, shortsighted and misguided.
‘Concerted activity’ protected
The NLRA covers a wide range of private employers engaged in interstate commerce and provides a variety of protections to all nonsupervisory employees (regardless of whether they belong to a union), including the Section 7 right to “concerted activity.” Section 7 gives employees the right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection. For example, concerted activity may include employees acting together to complain about their wages, benefits, or working conditions.
Activity is concerted if an employee engages in the action with or on the authority of other employees. However, the term is interpreted loosely to include individual employee action intended to initiate or induce group action and may include conduct that has no direct connection to union activity.
Employees may claim that their Section 7 rights have been violated and file an unfair labor practice (ULP) charge under Section 8 of the Act. If a ULP is proven, the NLRB may impose remedies, including an order that the employer stop the practice, an order to reinstate discharged employees with back pay and benefits, rescission of discipline, or a requirement that the employer engage in other remedial activities such as reading an admission of guilt, issuing an apology, or posting a copy of employee rights (including the right to have a union) and the corrective actions taken by the company.
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NLRB scrutinizes policies that might impinge on concerted activity
To protect alleged concerted activity, the NLRB has taken an increasingly active role in reviewing commonplace employer policies and rules, including confidentiality policies, social media policies, and at-will- employment policies. An employer rule or policy may violate the Act if it:
- Explicitly restricts concerted activity, regardless of whether the rule has ever been enforced;
- Would reasonably tend to chill (dissuade) employees from engaging in concerted activity (again, regardless of whether the rule has been enforced);
- Was enacted in response to union activity; or
- Is applied to restrict concerted activity.
The result of a particular case often involves a balancing of employees’ Section 7 rights and the employer’s right to implement necessary rules for employee conduct.
NLRB finds workplace investigation confidentiality request unfair
Confidentiality provisions have been the target of NLRB ire for many years on the basis that they are too generally and broadly written. Recently, the Board has begun examining confidentiality provisions as they pertain to workplace investigations and social media policies. On July 30, the NLRB reiterated that a general admonition that investigation witnesses keep the subject matter of a workplace investigation confidential contravenes Section 7 rights.
In the July case ― Banner Health Systems d/b/a Banner Estrella Medical Center and James A. Navarro ― an employee complained to HR after he was accused of insubordination, and he was asked not to discuss the matter with coworkers while it was being investigated. The employee later filed a ULP claim after receiving “coaching” and a negative performance evaluation for his alleged insubordination.
The employee argued that the coaching and evaluation violated Section 8 because they were motivated by his concerted activity. Further, he contended that the employer’s confidentiality agreement and its general practice of advising investigation witnesses not to discuss the subject matter of pending workplace investigations also violated Section 8.
The NLRB reviewed an administrative law judge’s (ALJ) findings on three issues. First, the judge had ruled that neither the coaching nor the evaluation was motivated by the employee’s exercise of his Section 7 rights. Second, the ALJ found that the employee confidentiality agreement ― which exposed employees to discipline for disclosing “private employee information (such as salaries, disciplinary action, etc.)” ― could reasonably be construed to violate Section 7. That’s because “it requires an employee to get permission from another employee to discuss the latter’s wages or discipline.” Effectively, the NLRB advocates that employees be able to discuss that sort of information without restriction as part of concerted activity.
As to the third issue, the employer acknowledged that during investigations, HR investigators ask employees who are interviewed not to discuss the matter with their coworkers while the investigation is ongoing. The ALJ concluded that the employer’s “suggestion” served the legitimate business purpose of preserving the integrity of the investigation “so that employees give their own version of the facts and not what they heard another state.” That is often one ― but only one ― of several reasons for a confidentiality instruction, but the ALJ addressed no others.
A three-member panel of the NLRB agreed with all but the third finding. Relying on Hyundai America Shipping Agency, a 2011 NLRB case, a panel majority concluded that Banner’s “blanket approach” to investigation confidentiality didn’t outweigh employees’ Section 7 rights in all situations. Rather, the majority ruled that Banner needed to make case- specific determinations about whether a confidentiality restriction was necessary to preserve the integrity of a particular investigation.
Significantly, the NLRB provided no guidance on whether any additional factors ― or what other factors beyond investigation integrity ― might be important in justifying a confidentiality instruction. That’s likely due to the fact that the NLRB’s decision in the Hyundai case also provided little analysis or guidance.
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Another example
In the Hyundai case, an employee made multiple complaints, including allegations of sexual harassment, hostile work environment, and drug use, which Hyundai investigated. Hyundai acknowledged that during workplace investigations, it “routinely cautioned employees orally not to discuss matters that were under investigation.” The NLRB affirmed an ALJ’s determination that Hyundai hadn’t justified a confidentiality instruction in the particular case at issue.
Notably, Hyundai argued that it had legitimate business reasons for its instruction, including “the desire to protect the victim, witnesses, and accused harasser in the investigation; to preserve confidentiality consistent with the [EEOC] guidelines and state and federal courts; and to avoid potential liability from accused harassers in defamation and other causes of action.” However, the NLRB didn’t address any of those legitimate reasons. Instead, it relied on two earlier cases: (1) Caesar’s Palace, 336 NLRB 271 (2001), and (2) Phoenix Transit Systems, 337 NLRB 510 (2002).
In the Caesar’s case, the NLRB upheld a confidentiality restriction during an investigation of employee drug use, concluding it “outweighed” Section 7 rights because it was designed to “ensure that witnesses were not put in danger, that evidence was not destroyed, and testimony was not fabricated.” By contrast, the employer in the Phoenix case sought to enforce confidentiality regarding investigation of a sexual harassment complaint 1 years after the investigation ended. The disciplined employee (who was one of the original complainants) was never told of the existence of an investigation or its results. As a result, he later asserted that the employer had failed to address the harassing behavior.
Based on those cases, the judge in the Hyundai case concluded that under the NLRB’s “balancing test, it is the [employer’s] responsibility to first determine whether in any give[n] investigation witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, and there is a need to prevent a cover[-]up.” The ALJ continued, stating:
Only if the [employer] determines that such a corruption of its investigation would likely occur without confidentiality is the [employer] then free to prohibit its employees from discussing these matters among themselves. There is no evidence that [Hyundai] conducts any such preliminary analysis. To the contrary, it seems that [Hyundai] merely routinely orders its employees not to talk about these matters with each other.
As in the Banner case, none of these cases discussed any other factor that might justify an instruction to keep an investigation and related interviews confidential, leaving employers with only the factors articulated in the Caesar’s case for guidance.
Other factors support a confidentiality restriction
That shouldn’t be the case. The factors in the Caesar’s decision, which involved only the integrity of the investigation, are important, but they aren’t the only factors. For individuals involved in workplace investigations, it is difficult to accept that confidentiality can be requested or required only in limited circumstances. Workplace investigations are often an extremely valuable and necessary tool for thoroughly and appropriately responding to employee concerns and complaints, resolving workplace conflict, and avoiding legal liability. Thorough and objective investigations allow employers to (1)gather information before acting (or overreacting), (2)make informed decisions about how to best address and resolve conflict, and (3)determine what, if any, corrective action to take.
Even when an investigation doesn’t implicate legal issues, confidentiality often is a significant concern, the lack of which can have a chilling effect on both potential complainants and witnesses and thus handicap an employer’s ability to conduct effective investigations, resolve conflict, and address employee concerns. In some environments, lack of confidentiality may effectively prevent an employer from conducting useful investigations.
Those considerations are even more critical for investigations involving legal issues like the ones in the Hyundai case. Frequently, employers must conduct investigations of alleged harassment and discrimination in order to uphold their duty to “prevent and correct promptly” such behavior as required by the U.S. Supreme Court’s decisions in the Faragher and Ellerth cases.
Under the Faragher and Ellerth decisions, it is the employee’s duty to make a prompt complaint and the employer’s duty to, among other things, respond promptly and appropriately, often with an investigation. In those investigations, and in investigations of other legal issues, confidentiality is crucial to (1) upholding and supporting antiretaliation policies and (2) avoiding the chilling effect on employees who may be reluctant to lodge legitimate equal employment opportunity (EEO) complaints or participate in investigations because of a lack of reasonable confidentiality restrictions and efforts.
As HR professionals know, complainants and witnesses frequently are as concerned about confidentiality and retaliation as they are about the underlying legal issues. Often, a perceived―let alone an imposed―lack of confidentiality is the largest hurdle to witness participation and an effective investigation. A lack of confidentiality only sets the groundwork for retaliatory behavior and makes it harder for an employer to fulfill its obligation to address the misconduct. A lack of confidentiality certainly doesn’t foster an employer’s antiretaliation policy. Rather, it makes it appear that you aren’t concerned about confidentially or retaliation, which can be interpreted as a lack of concern for the complainant or witness.
Moreover, it’s not always clear at the outset of an investigation whether the subject matter of a complaint or concern implicates or will implicate EEO or other legal issues. The chilling effect of a confidentiality prohibition could severely handicap your ability to conduct an investigation to even determine if a particular situation raises EEO or other legal issues. Nevertheless, you should err on the side of caution by conducting an investigation to determine the matters at issue.
Also noticeably absent from the Banner and Hyundai cases is any discussion of a reasonable time frame for a confidentiality restriction. It seems likely that a confidentiality restriction limited to a reasonable time frame for completion of the investigation would be more acceptable than a broader time frame. That appears to have been a factor in the Phoenix case.
EEOC supports the confidentiality of investigations
The EEOC agrees that confidentiality is a key component of an effective workplace investigation of harassment. Although it was last updated in 1999, the EEOC’s “Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors” (available at www.eeoc.gov/policy/docs/harassment.html) provides that “an anti-harassment policy and complaint procedure should contain, at a minimum, the following elements: … Assurance that the employer will protect the confidentiality of harassment complaints to the extent possible.” The guidance continues: “An employer should make clear to employees that it will protect the confidentiality of harassment allegations to the extent possible.”
Naturally, you can’t hope to maintain confidentiality if employees aren’t asked or have no obligation to do likewise. Thus, your duty to maintain confidentiality would at least include advising witnesses of the confidentiality of the investigation’s subject matter, if not an instruction to keep the matter confidential. A mere request that employees keep investigation matters confidential, without the possibility of corrective action for a breach of confidentiality, isn’t particularly effective. Accordingly, for years, employers have admonished investigation witnesses that a breach of the confidentiality expectation could lead to corrective action.
Unfortunately, the NLRB seems not to have recognized or considered these important justifications. Future cases will be needed to define when the EEOC’s approach trumps the NLRB’s approach or how to make the two approaches compatible. Unfortunately, that means increased uncertainty and expense for employers in the meantime.
What to do―for now
In light of the NLRB’s current position and the EEOC’s contrary position, you should proceed with caution. You may want to think about taking a number of steps to make a confidentiality requirement during an investigation more likely to pass NLRB muster, including:
- Limiting confidentiality instructions to investigations of complaints and issues that implicate or are likely to implicate EEO or other legal issues or when investigation integrity is a particular concern;
- Considering and documenting why confidentiality is necessary to a particular investigation;
- Tailoring the confidentiality requirement to the specific subject matter of the investigation and matters discussed in investigatory interviews while the investigation is ongoing;
- Limiting the confidentiality instruction to employees who will or are likely to be interviewed during the investigation because they have personal knowledge of events or other directly relevant information;
- Clarifying that the confidentiality restriction isn’t intended to prevent employees from addressing concerns with one another or with the employer; and
- Explaining to witnesses that the purpose of the confidentiality restriction is to:
- Preserve the integrity of the investigation process;
- Encourage employees to speak up when they have a problem and give them confidence that they may speak the truth;
- Uphold your antiretaliation policy; and
- Allow you to conduct thorough and objective investigations, which, in turn, allows you to effectively address employee complaints and concerns and resolve workplace conflict.
It also may be appropriate to forgo the threat of discipline for individuals who breach confidentiality.
Obviously, this is a rapidly changing area of the law. Stay tuned for further developments.
Chris Chrisbens is the lead attorney for Holland & Hart’s affirmative action planning and Office of Federal Contract Compliance Programs (OFCCP) service. He can be reached at fcchrisbens@hollandhart.com or 303-295-8193.