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NLRB Severely Undermines Employer Investigation Rights

on Wednesday, 15 July 2015 in Labor & Employment Law Update: Sarah M. Huyck, Editor

Once upon a time, common sense typically governed employee misconduct investigations. In those days, employers understandably and routinely cautioned employees not to discuss pending investigations with coworkers, and protected the written statements of potentially vulnerable employees who reported coworker misconduct.

Normal thinking in those “good ole days” suggested that collaboration among coworkers during ongoing investigations might lead to peer pressure, and potentially compromise the integrity of investigations. Likewise, common sense recognizes the very real potential that employees in trouble sometimes retaliate against coworkers who are unwilling to support their “side of the story,” or who report their misconduct.

Unfortunately, that logic no longer automatically applies, at least according the National Labor Relations Board. In Banner Estrella Medical Center, 362 NLRB No. 137 (June 26, 2015), the Board explains:

“employees have a [legally protected] right to discuss discipline or ongoing disciplinary investigations involving themselves or coworkers. Such discussions are vital to employees’ ability to aid one another and addressing employment terms and conditions with their employer.”

The Banner Estrella decision further clarifies that “an employer may restrict those discussions only where the employer shows that it has a legitimate and substantial business justification that outweighs employees’. . . rights.”

So when does an employer have a “substantial business justification” to justify an attempt to keep an investigation confidential? According to the Board, only when the employer can prove that “evidence is in danger of being destroyed, testimony is in danger of being fabricated, and there is a need to prevent a cover-up.” Under today’s Board standards, employers must be able to prove with “objectively reasonable” evidence that corruption “would likely occur” in order to legally prohibit coworker discussion about ongoing investigations.

In other words, if you “think” or simply “worry” that peer pressure or evidence tampering may occur, that’s not good enough. Today, you must objectively prove it is “likely.”

There are several glaring problems with the Board’s current logic. First, collusion or witness tampering among employees is not typically uncovered in advance, if ever. The obvious intent of tampering or collusion is to keep it secret. Therefore, expecting employers to prove with “objectively reasonable” evidence that “testimony is in danger of being fabricated,” will be in most cases impossible without anecdotal evidence of the same type of behavior.

Furthermore, why is it necessary for employers to prospectively prove that “testimony is in danger of being fabricated” in any case involving a potential discharge, or other potentially severe adverse employment consequences? Isn’t it already obvious, as it was for previous decades, that requesting confidentiality is a reasonable precaution when employees may be tempted to improperly influence coworkers to protect job security?

As if that standard is not disturbing enough, on the very same day as the Banner Estrella decision, the Board also saw fit to overrule its own nearly 40-year-old precedent affording employers the right to protect witness statements from examination by unions representing the employees who may be in trouble as a result of the witness statement. Until its recent change of heart, the Board for decades knew that requiring the pre-arbitration disclosure of witness statements “would diminish rather than foster the integrity of the grievance and arbitration process.” Anheuser-Busch, 237 NLRB 982, 984-985 (1978).

Why protect witness statements from disclosure to unions? According to the Board’s well-reasoned previous logic, because “witnesses whose statements are disclosed prior to arbitration hearings could be subject to coercion and intimidation.” Back then, the Board understandably recognized “that witnesses may be hesitant to provide a statement in the first place absent an assurance that the statement will not be disclosed prior to the hearing.”

Today, and as a result of the Board’s June 26, 2015, decision in American Baptist Homes of the West d/b/a Piedmont Gardens, 362 N.L.R.B. No. 139 (2015), a different standard applies. Under today’s new standard, when an employer argues that it has a confidentiality interest in protecting witness statements from disclosure, the Board will apply a “balancing test.”

More specifically, the Board will weigh the union’s need for examination of witness statements against any “legitimate and substantial confidentiality interests established by the employer.” The new balancing test will be applied on a case by case basis. That leaves employers in the awkward position of never being certain whether the Board will agree that the need for confidentiality outweighs the unions’ interest in representing other employees who may be in trouble.

Stated a different way, employers who refuse to disclose witness statements upon request by a union must now be prepared to convince the current Board that they have “legitimate and substantial confidentiality interests” that justify the refusal. Employers who guess wrong about their ability to prevail under the new “balancing test” commit an unfair labor practice. If employers unlawfully refuse to disclose witness statements, the underlying employment decision they are trying to protect may also be in jeopardy.

And so goes today’s “progressive” attempts by the Board to protect employees from their employers’ confidentiality practices.

Mark McQueen

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