The holidays arrived early last week for employers and management-side labor attorneys, as the National Labor Relations Board issued a decision approving employer policies that prohibit the discussion of pending workplace investigations. In Apogee Retail LLC d/b/a Unique Thrift Store and Kathy Johnson, Cases 27-CA-191574 and 27-CA-198058, the Board considered two workplace rules: “one requiring employees to ‘maintain confidentiality’ regarding workplace investigations into ‘illegal or unethical behavior’ and the other prohibiting ‘unauthorized discussion’ of investigations or interviews ‘with other team members.’”

In a 3-1 decision, the Board discarded the Banner Estrella Medical Center test, which put the burden on employers to seek confidentiality on a case-by-case basis. As a result, the Board upheld the legality of workplace investigative confidentiality rules, so long as the time period is limited to the duration of the subject investigation. The decision is a boon to employers seeking to maintain confidential investigations without implicating employee rights granted by Sections 7 and 8 of the National Labor Relations Act.

The deposed Banner Estrella standard had set a high bar for employers seeking confidentiality of workplace investigations. It required an employer demonstrate a “legitimate and substantial business justification that outweighs employees [NLRA] Section 7 rights.” To carry that burden, employers had to provide evidence that ‘investigation witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, and there is a need to prevent coverups.”

The Board articulated several reasons for rebalancing employer and employee interests, including (i) that Banner Estrella ignored Supreme Court precedent ordering the Board to strike such a balance, (ii) Banner Estrella failed to recognize employers’ legitimate reasons for requiring confidential investigations (which inured to the benefit of employers and employees), and (iii) that Banner Estrella was inconsistent with EEOC guidance that instructed employers to maintain the confidentiality of harassment investigations, so that employees will feel empowered to report such harassment.

In Apogee, the Board determined that the challenged rules were lawful because the impact to employee rights was “comparatively slight,” because the rules were narrowly tailored to prohibit discussion of the workplace investigations and related interviews themselves, but did not prohibit discussion of the underlying incidents, and workplace disciplinary issues generally. In addition, the employer set forth “several and substantial business justifications” that supported confidentiality, including (1) theft prevention, and promotion of prompt action, (2) the interests of employee privacy and retaliation prevention, and (3) to “ensure the integrity of an investigation…for the benefit of both employers and employees.” The matter was remanded because the employers’ rules did not limit the confidentiality requirement to the duration of the investigation.

In dissent, outgoing Board Member Lauren McFerran – whose term expired the same day the Board issued the Apogee decision, December 16, 2019—argued that the majority option will result in a “likely chilling effect on workers—who will feel compelled to choose safe silence over risky speech” and painted the majority’s decision as out of touch with the issues and balance of power undergirding today’s workplace dynamics. The majority shared the dissent’s concerns, but neatly summarized its response:

While Banner Estrella may have increased the scrutiny of employers with ill intent, it also hobbled countless employers who have their employees’ welfare at heart and in whose hands a workplace investigation is an instrument of justice. Moreover, our decision today does not reduce the level of scrutiny applied to employers seeking to curtail the exercise of employee Section 7 rights, since nothing in our decision countenances investigative confidentiality rules that would prohibit employees from speaking with each other about events giving rise to an investigation or from blowing the whistle to the EEOC, the Board, or other Federal or State agencies.

For now, the Board’s decision offers employers clarity when drafting handbooks and conducting workplace investigations: i.e., confidentiality requirements are permissible, as long as they are limited to the duration of the investigation. Employers should immediately consider revisiting their personnel policies concerning internal investigations and inserting a provision concerning maintenance of confidentiality of such investigations. As always, Murtha lawyers are available to assist with policy revision and to discuss compliance with the NLRA and other relevant employment laws.