Under the National Labor Relations Act (NLRA), employees have a right of collective action, and employers are prohibited from interfering with that right. But these provisions can conflict with an employer’s desire and ability to regulate conduct in the workplace.

One such conflict arises when employers conduct internal investigations. Employers may want to keep those investigations confidential, so that employees do not spread information about them through the workplace or coordinate their responses.

In recent years, however, the National Labor Relations Board (NLRB) took a dim view of those interests. Four years ago, the NLRB adopted a strict test for when employers could demand confidentiality in connection with internal investigations. See Banner Estrella Medical Center, 362 NLRB 1108 (2015). It said that an employer could only restrict employees’ discussions of ongoing disciplinary investigations if it could show a “legitimate and substantial business justification” that outweighed employees’ right of collective action.

That all changed this month, when the NLRB overruled the Banner Estrella rule. See Apogee Retail LLC d/b/a Unique Thrift Store and Kathy Johnson, Cases 27–CA–191574 and 27–CA–198058. In Apogee Retail, the NLRB said that Banner Estrella had “failed to consider the importance of confidentiality assurances to both employers and employees during an ongoing investigation.” Employers want confidentiality, it said, to ensure the integrity of the investigation, preserve evidence, encourage prompt reporting, and protect employees from dissemination of sensitive information. Employees can also use investigative confidentiality rules to avoid pressure by others to disclose what was said during interviews.

Because of these interests, the NLRB decided to abandon the Banner Estrella burden-shifting test, and instead to use an ordinary balancing test to evaluate investigative confidentiality rules. Under that test, it said, rules requiring confidentiality for open investigations are presumptively lawful.

The takeaway from the Apogee Retail decision is that employers now have much greater flexibility to adopt confidentiality rules for ongoing investigations. Banner Health suggested that employers had to evaluate each individual investigation and find a strong justification for imposing confidentiality. After Apogee Retail, that burden has now been lifted.

But employers are not out of the woods yet. The NLRB still cautioned that it does not countenance confidentiality rules that would prohibit employees from speaking about events giving rise to an investigation, or from blowing the whistle to government agencies. Moreover, if confidentiality rules are not “limited on their face to open investigations,” they will be viewed more harshly.