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The Investigation Confidentiality Conundrum

Who is Noel Canning and What Has She Done to My Confidentiality Policy?
For years, employers have investigated complaints of discrimination and harassment on a confidential basis. In light of recent decisions by the NLRB, however, employers should abandon their practice of requesting confidentiality in every investigation and limit this request only to those investigations where confidentiality is “truly necessary” to protect against evidence destruction, witness endangerment or to prevent a cover up.

EPS' RealSolutions® Podcasts presents an interview with this month’s author, Carrie O’Gara. To learn more about Carrie’s experience, listen to our podcast.

Title VII and Employers’ Duty to Investigate 
Title VII of the Civil Rights Act prohibits certain acts by employers against applicants and employees. Under Title VII, it is illegal to discriminate against someone because of their race, color, religion, sex, national origin, age, disability or genetic information. It is also illegal to retaliate against someone because they have complained about discrimination, filed a charge of discrimination, or participated in an investigation or lawsuit.[1] The EEOC, as well as the courts, have gone to great lengths to instruct employers on their duties to ensure that these protections of Title VII are enforced. 

In order to provide a work environment that is free from discrimination and harassment, employers invest considerable efforts drafting policies promoting a respectful environment and listing the types of behaviors that are prohibited. Employers publish these policies in handbooks, on posters and on websites. To ensure that these policies are followed, they also publish instructions on how to report violations which many times include a website or hotline with specific instructions on how to make an anonymous report.[2] Employers often include in these publications that all concerns of discrimination and harassment will be investigated in a prompt, thorough and impartial manner. [3] These efforts assure that applicants and employees who make complaints, or those who participate in investigations, will be protected against retaliation. 

Employers’ Reliance on Confidentiality Policies in Investigations 
To ensure that investigations are conducted properly, employers have consistently relied on confidentiality policies that prohibit or at least discourage participants from discussing an ongoing investigation. Discouraging discussion of ongoing investigations helps protect participants from gossip, speculation and in many cases, retaliation. In the past, courts have upheld the use of confidentiality policies and expressed support citing the employer’s need for “discretion and confidentiality in investigations.” [4] 

In 2011, that changed. In that year, the NLRB decided Hyundai American Shipping Agency, 357 NLRB NO. 80 (decided August 26, 2011) and confidentiality polices were officially under fire. In Hyundai, the Board held that a company policy broadly barring employees from discussing an internal investigation was unlawful since the employer failed to engage an individualized review of each investigation to determine whether such request was “truly necessary.” [5] In that case, the Board affirmed the administrative law judge’s (ALJ) decision that the verbal warning given in each investigation was overly broad and discriminatory. The ALJ found that it was the employer’s responsibility to show that in any given 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 a cover up.” The Board ruled that Hyundai had failed to determine whether there was a substantial justification for quieting employees in this investigation and as such, that the policy violated the employee’s rights under Section 7 of the NLRA to discuss the terms and conditions of their employment. 

One year later, in Banner Health System 358 NLRB No. 93 (decided July 30, 2012) the Board, reiterating this sentiment and in relying on Hyundai, held that a blanket confidentiality provision was unlawful. In Banner, the ALJ actually found in the employer’s favor that the confidentiality instruction was appropriate “for the purpose of protecting the integrity of the investigation” since it would ensure that employees would “give their own version of the facts and not what they heard another employee state.” This time it was the NLRB who imposed the Hyundai standard and disagreed with the ALJ, finding that the employer’s generalized concern of protecting its investigation did not outweigh employees’ section 7 rights. [6] 

In the unlikely event that employers were unclear on the NLRB’s message, the Board ruled on Boeing v. Joanna Gamble, (19-CA-089374, decided July 26, 2013) once again reiterating its displeasure with broad based confidentiality policies – even when the complaining employee admitted she violated the non-disclosure policy and where both sides agreed that no harm came from the disclosure. [7] 

Who is Noel Canning? 
Just when employers had all but torn up their broad based confidentiality policies, along comes NLRB v. Noel Canning, 134 S.Ct. 2550 (decided June 26, 2014) a decision that had nothing to do with confidentiality policies. Instead, Noel Canning was a decision that challenged President Obama’s authority to make three recess appointments to the NLRB in January, 2012. In June of 2014, the Supreme Court held that such appointments by President Obama were made in error, resulting in the nullification of dozens of decisions made by a “quorum-less board” which included the Hyundai and Banner cases. Each of these cases has been remanded, and therefore is no longer binding on employers. 

What Has She Done with My Confidentiality Policy? 
How then do employers conduct a confidential investigation that is prompt, thorough, impartial and free of retaliation, while not violating an employee’s right to discuss the terms and conditions of his or her employment? Very carefully and with a keen eye toward the facts known to the investigator at the time the investigation is initiated. 

Technically speaking, the decision in Noel Canning nullified the rulings in Hyundai and Banner, but the decision did not change the sentiment that increasingly has been expressed by the Board, namely that quieting employees, even in the midst of an investigation, is not well received. Employers should review their existing policy on confidentiality and when instructing employees determine, on a case by case basis, whether confidentiality is “truly necessary” i.e. whether facts exist in each particular case to satisfy the court that the employer’s interest in requesting confidentiality in this investigation outweighs any potential infringement of an employee’s Section 7 rights. Ironically, this instruction creates its own challenge of conducting investigations in a consistent manner as employers will now inevitably require confidentiality in some investigations, while not requiring it in others. 

As with all sound employment practices, an employer’s decision will rest on the particular facts in each case. Best practices dictate that each employer and each investigator stay abreast of the NLRB’s rulings on using confidentiality policies and use them with discretion and intention. Confidentiality policies should not be abandoned rather they should be used to promote the employer’s objective of conducting a prompt, thorough investigation keeping evidence and witnesses safe, while recognizing the employees’ right to discuss the terms and conditions of their employment. 

As stated in Burlington Industries, Inc. v. Ellerth, “Title VII is designed to encourage the creation of anti-harassment policies and effective grievance mechanisms.”Ellerth, 118 S. Ct. 2257 (1998) at 2270.

3 The EEOC rules specifically state that employers shall conduct a prompt, thorough and impartial investigation. Likewise, EEO guidelines caution employers that they should make clear to employees that it will protect the confidentiality of allegations, particularly in harassment claims, to the extent possible, always aware that guarantees are not possible, but that allegations should be shared only with those who need to know about it. EEOC Guidelines 915.002 June 18, 1999. 

4 IBM Corp., 341 NLRB 1288, 1293 (2004) and NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 222 (1978).

A unanimous panel of the Board adopted the ALJ’s finding that the employer violated the Act by enforcing an oral rule prohibiting employees from discussing with other persons any matters under investigation by its human resources department. The Board held that only when the employer can show that such a corruption of its investigation would likely occur without confidentiality is the employer then free to prohibit its employees from discussing these matters among themselves. 

In Banner, the NLRB noted that the fact that Banner did not threaten to discipline employees for breaching confidentiality did not save this otherwise discriminatory instruction. 

As recently as February, 2015 the NLRB relied on Hyundai, in Battle’s Transportation, Inc. and Jerome Kearney, 362 NLRB No. 17 (February 25, 2015, 05-CA-098088). There the NLRB held that an employer’s confidentiality policy that barred employees from discussing “human resources related information” and “investigations by outside agencies” was overbroad and unlawful.