May 26, 2020

Confidentiality is Back in Fashion Following Labor Board Decision

The National Labor Relations Board (NLRB) has held under the National Labor Relations Act (NLRA) that employers may maintain and enforce rules requiring confidentiality for the duration of a workplace investigation. Apogee Retail LLC d/b/a Unique Thrift Store368 NLRB No. 144 (Dec. 16, 2019).

The NLRB also held that, if the employer’s confidentiality rule extends beyond the duration of the investigation, the employer must show a substantial business justification for that extension.

The decision overruled Banner Estrella Medical Center, 362 NLRB 1108 (2015). Chairman John Ring and Members Marvin Kaplan and William Emanuel were in the majority. Then-Member Lauren McFerran dissented.

Workplace investigations have become a fact of life. Employers find it necessary to conduct sophisticated investigations on a variety of issues, including theft, substance abuse, and harassment, to name a few. The conventional wisdom is that investigations are more effective if they are treated as confidential; witnesses are likely to be more willing to share what they know, and co-conspirators are less able to coordinate their stories.

Banner Estrella

In 2015, in Banner Estrella, the NLRB (comprised entirely of members appointed by President Barack Obama) announced a rule that had the effect of significantly restricting an employer’s ability to keep the details of a workplace investigation confidential.

The employer had instructed its employees not to discuss ongoing workplace investigations with one another. The NLRB held that such an instruction would be lawful only if the employer could establish “that it has a legitimate and substantial business justification that outweighs employees’ Section 7 rights.” Further, an employer could not maintain a rule that required confidentiality in every case. Rather, an employer had to evaluate every investigation separately to determine if special circumstances warranted requiring employees to maintain confidentiality. Moreover, the burden was on the employer to prove its reasons for requiring confidentiality were valid and serious enough to outweigh employee interests in discussing workplace issues. Practically, any employer requirement to keep investigation details confidential would have been found unlawful if challenged.

Apogee Retail Rule

Apogee Retail expressly overrules Banner Estrella. The NLRB used the analysis it announced in The Boeing Company, 365 NLRB No. 154 (2017), for evaluating facially neutral rules that have the potential to interfere with NLRA Section 7 rights.

Boeing established three categories of rules: (1) those deemed to be lawful; (2) those that require case-by-case scrutiny, weighing the employer’s interest against the impact on Section 7 rights to determine legality; and (3) those that are designated unlawful on their face. (For more details about the Boeing decision, see our article, Labor Board Clarifies Boeing Work Rules Decision, Finds Confidentiality, Media Contact Rules Lawful.)

Applying Boeing, the Board recognized the substantial interest employers and employees have in keeping investigation details confidential. The NLRB explained that the most compelling reasons for confidentiality are:

  1. The ability to give employee witnesses assurances that their identity will not be disclosed;

  2. To ensure the integrity of the investigation;

  3. To preserve evidence;

  4. To encourage prompt reporting of safety, harassment, and other issues; and

  5. To protect personal information.

The Board noted that confidentiality is so valued in the investigative process that it, the Equal Employment Opportunity Commission (EEOC), and the Occupational Safety and Health Administration (OSHA) take steps to preserve confidentiality during their investigations. In fact, the EEOC states in its enforcement guidance that employers should assure employees who participate in employer harassment investigations that confidentiality will be protected.

The Board struck a new balance: the benefits of maintaining confidentiality during an ongoing investigation are substantial and predictable and outweigh Section 7 rights. However, the NLRB also held that the interest in confidentiality does not necessarily outweigh Section 7 rights after the investigation is concluded.

The NLRB issued the following guidance:

  1. If the employer’s rule requiring employees to keep investigatory details confidential is expressly limited to the duration of the investigation, the rule is a Category 1 rule under Boeing and is lawful.

  2. If the rule extends the confidentiality requirement beyond the closing of the investigation, the rule is a Category 2 rule under Boeing, and the employer must show some justification for extending the confidentiality requirement that outweighs Section 7 rights.

Investigative policies and procedures should be modified to clearly require confidentiality only for the duration of an ongoing investigation and to reserve the right to extend the requirement after the investigation is concluded, when legitimate justification exists.

Jackson Lewis P.C. © 2020


About this Author

Philip B. Rosen Jackson Lewis  Preventive Practices Lawyer & Collective Bargaining Attorney

Philip B. Rosen is a Principal in the New York City, New York, office of Jackson Lewis P.C. He is a member of the firm's Board of Directors and co-leads the firm's Labor and Preventive Practices Group. He joined the firm in 1979 and served as Managing Partner of the New York City office from 1989 to 2009.

Mr. Rosen lectures extensively, conducts management training, and advises clients with respect to legislative and regulatory initiatives, corporate strategies, business ethics, social media, reorganizations and reductions-...

Howard Bloom, Jackson Lewis, labor union attorney, unfair practice investigations lawyer, employment legal counsel, bargaining law

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues. He trains and advises executives, managers and supervisors on union awareness and positive employee relations, and assists employers in connection with union card-signing efforts, traditional union representation and corporate campaigns, and union decertification campaigns. He also represents clients at the National Labor Relations Board in connection with bargaining unit issues, objections and challenges, as well as unfair labor practice investigations and trials. Mr. Bloom also has been the spokesperson at countless first and successor contract collective bargaining negotiations, and regularly advises on collective bargaining agreement administration issues, including grievance/arbitration issues.

Mr. Bloom has appeared before the Massachusetts Supreme Judicial Court, the U.S. Court of Appeals for the District of Columbia, several U.S. District Courts, the National Labor Relations Board, the Massachusetts Labor Relations Commission, the Equal Employment Opportunity Commission and the Massachusetts Commission Against Discrimination.

Timothy J. Ryan, Labor and Employment Attorney, Jackson Lewis Law Firm

Timothy J. Ryan is a Principal in the Grand Rapids, Michigan, office of Jackson Lewis P.C. He has practiced exclusively in the labor and employment area since 1987, when he was admitted to the Bar.

Mr. Ryan is a frequent speaker and writer on topics including union avoidance, hiring and firing, family and medical leave, wage and hour laws, and other issues related to labor and employment law for employers. Mr. Ryan represents employers facing legal challenges in the following areas:

  • Union-Management...