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Not-So-Private Investigations

A recent NLRB decision aims to eliminate blanket confidentiality policies concerning internal investigations of employee misconduct. Experts say the ruling won't actually prohibit employers from insisting on employee confidentiality in many cases, but will force companies and their HR leaders to justify and document their reasons for requiring such secrecy.

Tuesday, August 28, 2012
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If a recent National Labor Relations Board decision is any indication, now would be a good time to review your internal workplace investigation policy, and maybe strike that part about blanket confidentiality requirements.

In a case stemming from an employee complaint at Banner Health System, the NLRB held, by a 2-to-1 majority, that an employer may not maintain a blanket rule prohibiting employees from discussing ongoing investigations of alleged wrongdoing. According to the Board, such a rule would violate Section 7 of the National Labor Relations Act, which protects employees' rights to engage in "concerted activities" for their mutual aid and protection, regardless of whether the employees belong to a union.

In the Banner case, general counsel for the NLRB claimed that the Phoenix-based medical center's "Interview of Complainant Form," which included a general instruction that employees lodging internal complaints not discuss them with co-workers during the ensuing investigation, violated the Act. The health system's HR consultant allegedly didn't provide employees with copies of the form during interviews -- instead using the form as a guide for conducting those interviews -- and didn't always relay instructions regarding confidentiality to complaining employees. The Board rejected Banner's claim that the confidentiality instruction was necessary to protect the investigation's integrity, and found the employer's "generalized concern" insufficient to outweigh employees' Section 7 rights.

The NLRB's ruling in the Banner case may not quite be a shot across the bow for employers, but still figures to affect how organizations and HR professionals craft policies regarding internal investigations, says Eric Stevens, a Nashville-based attorney with Littler Mendelson, a labor and employment law firm headquartered in San Francisco.

The decision's most significant (and injurious) impact may be seen in changes to harassment policies that ultimately dissuade employees from stepping up to report harassing behavior they've seen or been subjected to themselves, he says.

"It's imperative that employers maintain a policy that not only prohibits workplace harassment, but one that also encourages employees to utilize the company's policy to report and address potential harassment before liability attaches," says Stevens. "A traditional standard for such policies is the promise of as much confidentiality for the complaining employee as possible. The Board's assault on blanket prohibitions of discussing investigations is antithetical to this promise. Human resource personnel, as a matter of course, promise confidentiality to an employee. As employees learn that their complaint may not be kept confidential, they are less likely to come forward with complaints of harassment."

It's important to remember that this holding applies to both union and non-union employers, Stevens adds. "It's also important to keep in mind that the National Labor Relations Act does not protect management or supervisory employees. Consequently, the decision does not prohibit an employer from maintaining a blanket confidentiality rule during an internal investigation applicable to management and supervisory employees."

As Stevens points out, companies can still oblige employees to remain silent about an ongoing investigation in some, if not most, cases. But, the onus is now on employers to determine the need for confidentiality on a case-by-case basis, and be able to explain why it's required in a particular instance, he says.

The NLRB does concede that there may be limited circumstances in which an employer's legitimate business justification for confidentiality could outweigh an employee's Section 7 rights, says Stevens. "In prior decisions, the Board has recognized legitimate justification in circumstances involving matters such as workplace drug use and theft, for example. However, before a non-management employee may be instructed to not discuss an ongoing investigation, the Board requires a case-by-case analysis."

Employers and HR leaders must consider whether a witness or witnesses actually require protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated or the company feels there is a need to prevent a potential cover-up, he says.

Indeed, the recent NLRB decision "requires employers to do more than presume a need for confidentiality," says Ronald Meisburg, a Washington-based partner in the labor and employment law department of Proskauer Rose. "Now the employer must specifically determine that confidentiality is needed to protect the integrity of the investigation."

However, the way in which such a determination is made, how it should be documented and the type and degree of evidence required to demonstrate a need for confidentiality remains unclear, he says, adding that "these questions may be fleshed out in practice and in future cases."

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What is clear, though, is that the NLRB decision gives companies and HR professionals cause to "carefully review their current written policies dealing with the confidentiality of investigations, and be aware of the [organization's] limitations on when employees may be instructed to not discuss an internal investigation," says Stevens.

"Most employers' policies will require some modification, and HR personnel will need to be prepared to make the necessary case-by-case analysis as early in the investigation as possible, establish a specific legitimate business justification for requiring confidentiality, and document that analysis."

Indeed, putting your reasons in writing outlines for employees why confidentiality is necessary and expected, and helps protect the employee and the organization's best interests, says Doreen Davis, partner in the labor and employment practice of Philadelphia-based Morgan, Lewis & Bockius.

"The 'why' will vary from investigation to investigation, but your reasons for requesting confidentiality -- the potential for a subsequent criminal investigation, preservation of evidence, for example -- need to be documented," she says. As far as updating your actual written investigation policy, be sure to remove language that could be construed as mandating blanket confidentiality among employees, adds Davis.

"That may just depend on the [policy's] wording. HR leaders must immediately look at their investigation policies, and change them to take out any kind of 'blanket confidentiality' requirements. In terms of the policy itself, that's probably all that really needs to be done."

HR leaders should also discuss investigation policies with the organization's labor and employment counsel, adds Meisburg. "Employer situations can and do differ, and the decision leaves some important questions unanswered. In addition, there is the possibility, even the likelihood, of further litigation and legal development in the courts."

For now, employers should consider the development of a pre-investigative interview protocol for determining why a confidentiality instruction is necessary to properly carry out the investigation; a protocol that "can easily be applied in myriad investigative settings," says Meisburg.

"I understand that, to most HR professionals and their lawyers, the need for confidentiality is self-evident. But, at least for now, the NLRB doesn't see it that way."


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