Confidential investigation advice ‘helpful’ … for now
Posted: 6:50 am Fri, August 30, 2013
By Dolan Media Newswires
By Kimberly Atkins
The employment bar was roiled last year when the National Labor Relations Board ruled that a company policy requiring employees to keep interviews related to internal investigations confidential violated federal labor law.
But since then, the agency has been informally placing limits on that holding by issuing advice memoranda suggesting that companies can make reasonable case-by-case judgments about whether confidentiality is necessary — and attorneys have been eyeing them closely for guidance on how to advise clients.
“It seems to be that they have recognized that there need to be clearer rules,” said Ethan L. Don, an associate in the Bethesda, Md., office of The Law Firm of Paley Rothman, where he practices in the employment law and litigation groups.
But some lawyers are expressing concern that, despite the guidance in the memoranda, the board is still taking a heavy-handed approach to regulating how employers run their workplaces.
“The board is substituting its judgment about the necessity for confidentiality in an employer’s investigation,” said David P. Phippen, of counsel in the Fairfax, Va., office of Constangy, Brooks & Smith. “The board is saying the employer has to decide on a case-by-case basis if confidentiality is needed. But there are a lot of employers who truly believe it’s important in every case.”
Regulation by suggestion
Last year’s decision from the board in Banner Health Systems and James A. Navarro took many employment lawyers by surprise. In that case the board held 2-1 that a company had violated the National Labor Relations Act by imposing a blanket policy requiring confidentiality from all employees as a matter of course during internal investigations.
Employment lawyers representing companies expressed concern not only that the ruling would hamper companies’ efforts to effectively investigate complaints about alleged misconduct, such as sexual harassment or workplace safety violations, but also that the NLRB was extending its reach further into non-unionized workplaces. While federal labor laws have always applied beyond unionized settings, it was once rare for the board to bring unfair labor practice charges against employers whose workplaces were neither unionized nor in the process of holding union elections.
However, in 2012 the board seemed to shift course with rulings such as Banner Health and other cases brought by agency prosecutors. For example, shortly before that decision was handed down, an administrative law judge found that a non-union company policy requiring workers to “agree that the at-will employment relationship cannot be amended, modified or altered in any way” violated the Act in American Red Cross Blood Services and Lois Hampton. The board has also focused on non-union employers when scrutinizing company social media policies.
Since then, though, the board’s Office of the General Counsel has issued advice memoranda in pending cases that, while not binding or precedential, can help lawyers read the tea leaves as to whether their own clients’ policies may withstand board scrutiny.
In one typical recent memo, Associate General Counsel Barry J. Kearney found that a Tennessee-based company, Verso Paper, violated the NLRA with a confidentiality policy employees were required to sign that read in part: “In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation and retaliation. … To assist Verso in achieving these objectives, we must maintain the investigation and our role in it in strict confidence. If we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.”
But Kearney included in the memo language that the company should adopt to avoid running afoul of the law: “Verso may decide in some circumstances that in order to achieve these objectives, we must maintain the investigation and our role in it in strict confidence. If Verso reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.”
As a result of the advice memos, lawyers are now advising clients to take another look at their policies. When in doubt as to whether a policy would withstand NLRB scrutiny, the best advice is to follow the language the board’s counsel suggested, they say.
“It’s helpful to discuss with clients how to revise the handbook to retain confidentiality language but make sure that there is a case-by-case analysis and [clear rules on] … how far the confidentiality needs to be extended and how it’s got to be documented,” Don said.
Despite the suggested language, lawyers representing employers say that requiring confidentiality for all investigations is necessary for some employers.
“What the board is ignoring is a lot of these confidentiality policies are there to protect the employees being investigated as well as the employees who are victims” of the alleged misconduct, said Raymond J. Carey, a partner in the labor and employment practice of Foley & Lardner in Detroit. “And in states … that have laws protecting the reputation of employees, [employers] could actually be violating the law if information about an investigation is disclosed. It can be seen as defaming the victim.”
While most employment attorneys are aware that the NLRA applies beyond the union context, and that various state employment laws can also come into play, most employment policies are not written by lawyers.
“Most handbooks are written by laypeople — consultants or human resources professionals who don’t know the vagaries of state defamation law,” Carey said.
Lawyers said that, even given the guidance from the board’s memos, without NLRB decisions clearly delineating the extent of the confidentiality policy prohibition, lawyers are still swimming in uncharted waters.
“The big picture answer is yes, they are helpful,” Phippen said. “The downside is, whether it’s a year or two years from now when an actual case comes up, there is no requirement that the board follow what was said in the memo. It’s not binding.”