In Banner Health System, the National Labor Relations Board recently held that an employer's request that an employee being interviewed in connection with an internal disciplinary investigation not discuss the investigation with his coworkers violated its employees' rights under Section 7 of the National Labor Relations Act. Section 7 protects the right of employees to engage in "concerted activities for the purpose of collective bargaining or other mutual aid or protection," and, among other things, encompasses the right of employees to discuss their wages, hours, and other terms and conditions of employment.
The Board has long held that the rights guaranteed to employees under Section 7 include the right to discuss disciplinary investigations involving their fellow employees. However, the Board has never held that an employer's request for confidentiality in connection with such an investigation is per se unlawful. Recognizing that employers have an interest in keeping at least some internal investigations confidential, the Board instead has traditionally upheld employer confidentiality rules and requirements if the employer established a legitimate and substantial business justification for confidentiality that outweighed its employees' interest in discussing the investigation.
Although the Board paid lip service to this approach in Banner Health, its decision represents a troubling departure from many of its prior cases. However, the Board arguably foreshadowed its decision in Banner Health in a case decided last year. In that case, known as Security Walls, the Board found that another employer acted unlawfully in requiring that its employees maintain the confidentiality of any information they learned or provided during an internal investigation. Absent a showing of a substantial and legitimate business justification for the requirement, the Board ruled that the employer's blanket instruction not to discuss the investigation with other employees had a reasonable tendency to coerce employees, and thus constituted an unlawful restraint of their Section 7 rights.
The Board in Security Walls nevertheless reaffirmed that an employer's attempt to maintain the confidentiality of an internal investigation may be lawful if the employer can show a sufficiently compelling need for confidentiality. Many observers therefore felt that the Board's invalidation of the employer's confidentiality instruction stemmed largely from the fact that the instruction was coupled with policy language indicating that employees who failed to comply with the instruction would be subject to disciplinary action.
However, this interpretation of Security Walls was undermined by the Board's decision in Banner Health System, which found that the request for confidentiality at issue in that case was unlawful even though it was, in fact, merely a request, and was not coupled with a threat of disciplinary action if employees failed to honor it. Addressing an issue it had left open in Security Walls, the Board in Banner Health held that an employer's generalized concern with protecting the integrity of its investigation is insufficient to overcome its employees' Section 7 rights.
The decision is just one of many reflecting the current Board's trend of invalidating seemingly benign employment policies on the basis that they are overbroad and in violation of the National Labor Relations Act. Notably, the Banner Health decision was 2-1, with Members Griffin and Block comprising the majority. Members Griffin and Block were two of three Members who were appointed unilaterally by the President on January 4, 2012, during a purported Senate "recess." The appointments are controversial and raise a number of unresolved constitutional questions because the Senate was not in full recess, but was holding a series of "pro forma" sessions from December 20, 2011 until January 23, 2012. As a result, the appointments are being challenged. Although it is uncertain whether the appointments will be upheld, if the courts ultimately conclude that NLRB members were improperly appointed, the Banner Health decision (along with many others) is likely to be vacated.
Another avenue by which the decision might be challenged is through an appeal to the federal court of appeals. A decision out of the court of appeals would not resolve the issue on a nationwide basis since the Board's longstanding policy is to apply adverse rulings only within the circuit in which the court of appeals sits; however, because Banner Health arose out of Region 28 here in Arizona, the case is appealable to the Ninth Circuit. If the Ninth Circuit reverses the decision, employers in the Ninth Circuit (which includes Arizona) could potentially return to long-recognized fact finding techniques including routine requests for confidentiality.
However, unless and until the ruling is overruled or vacated, requesting "confidentiality" is now akin to waiving a red flag in front of a raging bull. In view of the Board's decisions in Security Walls and Banner Health, employers should review and revise their investigatory policies and procedures and make specific requests in connection with investigatory interviews that go to the heart of what employers are really seeking to avoid during internal investigations -- fabrication, lack of cooperation, intimidation, retaliation, and/or harmful gossip.
Michael D. Moberly
Ellen Joy Glass