NLRB Presumes Confidentiality of Investigative Reports is Lawful

In a long-anticipated decision on Dec. 16, 2019, the National Labor Relations Board (NLRB or Board) scuttled a 2015 agency decision that presumptively prohibited employers from requiring confidentiality of investigative reports.  

In Apogee Retail, 368 NLRB No. 144 (2019), the NLRB returned to its previous standard that presumes the legality of the maintenance of work rules requiring confidentiality of investigative interviews between an employer and employee. In Apogee, the employer maintained a workplace rule that created a duty upon employees to cooperate in investigations truthfully and maintain confidentiality regarding the investigation, including discussing the investigation or their interviews with other employees. The maintenance of the policy was challenged by the general counsel as a potentially impermissible restriction of employee rights under the National Labor Relations Act (Act) as defined by the NLRB in Banner Estrella Medical Center, 362 NLRB 1108 (2015).

In Banner, the Board held that ordinarily an employer was prohibited from instructing employees to not discuss ongoing workplace investigations with one another. The Board determined employees have a §7 right to discuss discipline or ongoing investigations involving themselves or co-workers. In order for an employer to lawfully restrict this speech, the employer would bear the burden of proving it has a legitimate and substantive business justification that outweighs the employees’ rights under the Act. To meet that burden, an employer would be required on a case-by-case basis to prove:

• the prohibition was necessary in order to protect an employee from retaliation;
• evidence was in danger of being destroyed;
• testimony was in danger of being fabricated; and
• there was a need to prevent a cover-up of evidence.

The Board rejected this standard and concluded that ordinarily an employer’s instruction of confidentiality would be presumed lawful. In doing so, the Board returned to its previous standard on the issue in Caeser’s Palace, 336 NLRB 271, 272 (2001). There, the Board held the NLRB must “balance” the employees’ and employer’s interests and the employer’s business justifications must be considered. The current Board criticized the Banner Estrella standard as being one in which “the employer’s interests are not even considered unless and until the employer demonstrates that witnesses needed protection, evidence was in danger of being destroyed, testimony was in danger of being fabricated, and there was a need to prevent a cover-up.” The Board criticized the previous standard as being “push-button law,” when an employee’s §7 rights are the only interest to take into account and factors favoring non-disclosure receive no weight at all.

It is important to recognize the new standard creates a presumption, but not an absolute license, to instruct employees to maintain confidentiality. First, the test applies only to an “open” or ongoing investigation. Further, the rules implemented by Apogee do not prohibit employees who were not interviewed or did not participate in an investigation from discussing the investigation. Rather, the presumptively appropriate prohibition extended only to employees who were interviewed or participated in the investigation and only for the duration of the investigation. Finally, if any justification for the confidentiality rule is determined to be illegal or fabricated, that could certainly be considered by the Board to invalidate the propriety of the rule.