On December 16, 2019, the NLRB changed the standard it uses when analyzing rules requiring confidentiality in workplace investigations. Confidentiality rules are now generally permitted and presumptively valid when limited to the duration of the investigation. Confidentiality rules extending beyond the investigation will be examined on a case-by-case basis.

Background. Since the Banner Estrella Medical Center decision in 2015, the Board has closely scrutinized confidentiality rules regarding workplace investigations. Such rules were interpreted to interfere with employees’ right under the NLRA to discuss workplace discipline and terms and conditions of employment.

Under the previous standard, the employer bore the burden of proving that its interest in maintaining confidentiality during an investigation outweighed the employees' rights. In carrying its burden, an employer was required to offer specific evidence that witnesses needed protection, evidence was in danger of being destroyed, testimony was in danger of being fabricated, or there was a need to prevent a cover-up.

With its decision in Boeing Co. in 2017, the NLRB announced a new balancing standard for determining whether facially neutral work rules violate the NLRA. Under the Boeing standard, the NLRB balances the potential impact of the work rule on employees’ rights against the employer’s legitimate interest in having the rule. The NLRB General Counsel, not the employer, bears the initial burden of demonstrating that the work rule potentially interferes with employees’ rights under the NLRA. If the General Counsel meets its burden, then the employer must show its legitimate business interests justifying the rule.

The Boeing balancing standard establishes three categories for work rules with varying levels of scrutiny. The Boeing standard had not been applied to confidentiality rules regarding workplace investigations until now.

The New Ruling. With its recent decision in Apogee Retail LLC d/b/a Unique Thrift Store, the Board explicitly overturned the Banner decision in favor of the Boeing standard, thus making it easier for employers to maintain these confidentiality rules. The Board reasoned that the previous standard failed to balance employers’ legitimate business concerns, failed to consider the importance of confidentiality assurances in workplace investigations, and was inconsistent with other Federal guidance. Now, the Board will apply the much friendlier Boeing test to confidentiality rules, as it does for other facially neutral workplace rules.

Investigative confidentiality rules which are limited to the duration of the investigation are now Category 1 rules under Boeing and lawful as a general matter. The Board ruled that investigative confidentiality rules that apply only to open investigations have a limited impact on employees’ rights that is significantly outweighed by employers’ interests in having such rules. Thus, as long as they are limited to the duration of the investigation, investigative confidentiality rules are now generally lawful.  

Investigative confidentiality rules that are not limited to the duration of the investigation will be analyzed on a case-by-case basis as a Category 2 rule under Boeing. However, unlike the previous standard where the employer carried the burden, the General Counsel now bears the initial burden of proving that the rule would potentially interfere with employees’ rights under the NLRA. If the General Counsel meets that burden, then the Board will balance any potential interference with employees’ rights against the rule’s legitimate business justifications. The Board explained that sufficient employer justifications may include: (1) prevention of theft and ability to respond quickly to misconduct through prompt investigations; (2) protection of employee privacy and safeguards against retaliation by managers or co-workers; and (3) ensure the integrity of the investigation for the benefit of both employees and employers.

Takeaways. While investigative confidentiality rules limited to the duration of the investigation are now generally lawful, such rules cannot broadly prohibit employees from discussing disciplinary incidents, terms and conditions of employment, or from requesting the help of a union representative during an investigation. Instead, confidentiality rules must be limited to participants’ discussions of an investigation or interviews conducted in the course of an investigation. Employers should review all existing policies regarding workplace investigations in light of the new standard. 

If any employers shied away from such policies under the old standards, consider whether your organization would benefit from implementing reasonable confidentiality rules. Employers can now feel confident in the legality of investigative confidentiality rules as long as they are limited to the duration of the investigation and do not broadly prohibit employees from discussing discipline or requesting help from the union. In regards to such rules that extend beyond open investigations, employers should consider the restrictions imposed on employees’ rights under the Act and be prepared to provide justifications for the rule. 

If you have any questions about the matters discussed in this issue of Compliance Matters, please call your firm contact at 818-508-3700 or visit us online at www.brgslaw.com

Richard S. Rosenberg
Eric W. Mueller
Charles Foster
Ballard Rosenberg Golper & Savitt, LLP