On December 17, 2019, the National Labor Relations Board (“NLRB”) held that confidentiality mandates during pending workplace investigations are lawful. This ruling overruled the NLRB’s recent precedent that such mandates infringe on the rights of employees (union or non-union) under the National Labor Relations Act (“NLRA”) to engage in “concerted protected activity”, which includes the right to discuss discipline or ongoing disciplinary investigations involving them or their coworkers.
This decision, Apogee Retail LLC d/b/a Unique Thrift Store v. Kathy Johnson, case number 27-CA-191574 and 27-CA -198058, relieves employers of the existing burden to establish, on a case-by-case basis, that its interest in conducting a specific confidential investigation outweighed the employees’ interest in exercising “concerted activity” rights. It further resolves conflict on this issue between the NLRB and the Equal Employment Opportunity Commission (“EEOC”) which advocates for employers to maintain the confidentiality of discrimination investigations to the extent possible in order to encourage bias victims to come forward, particularly in sexual harassment cases.
A recap of the changing precedent:
A 2015 NLRB decision known as Banner Health Systems found that employer instructions not to discuss ongoing workplace investigations were unlawful unless an employer could demonstrate that for any investigation where confidentiality was required, the integrity of the investigation would be compromised without it. The Banner Health dissent protested that the Board was not balancing competing employer/employee interests in workplace rules as required, but had instead put a thumb on the scale on the employee side. A subsequent development in a 2017 NLRB decision involving Boeing announced a new test for analyzing business interests in a workplace rule with workers’ rights by designating the rule into one of three categories : Category 1 where a rule is presumptively legal because there is no infringement on workers’ rights or the employer’s interest outweighed the employee’s interests; Category 2 which requires greater individual scrutiny as to a rule’s adverse impact on NLRA-protected conduct; and Category 3 rules which are presumptively unlawful as the adverse impact on NLRA rights is not outweighed by the employers interest in the rule.
In Apogee, the Board applied the Boeing analysis and found that open investigation confidentiality rules fit squarely in Category 1. The majority held that Banner Health had failed to recognize the importance of confidentiality assurances to both employers and employees during an ongoing investigation–in terms of ensuring the integrity of the investigation, obtaining and preserving evidence, encouraging prompt reporting of unsafe or discriminatory behavior without fear of retaliation and protecting employee sensitive personal information.
Apogee is a 3 to 1 decision with a strong dissent by the NLRB’s outgoing and last Obama administration appointee. In responding to the dissent, the majority reiterated that the current standard requires workplace rules to be viewed from the “perspective of an objectively reasonable employee who is aware of his legal rights but who also interprets work rules as they apply to the everydayness of his job” – a practical standard that incorporates the realities of today’s workplace.
Practical implications for employers:
Apogee provides a welcome bright line rule for employers who have a strong interest in maintaining the integrity of its internal investigations. Confidentiality rules that narrowly bar only disclosure of what is discussed in the course of an open investigation are intended to prevent witness coaching, aligning of stories, retaliation, privacy violations and the chilling of cooperation – all formidable barriers to getting to the truth. The #Me-too movement revealed that fear of retaliation is one of the top reasons that victims of sexual harassment do not come forward. And while 100% confidentiality in discrimination and other misconduct investigations can never be guaranteed, nor should it ever be promised, requiring parties and witnesses to not disclose on-going investigative information keeps a check on the rumor mill and advances the interest of employers and employees.
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