Company’s Nondisclosure Policy OK Despite Broad Language

HR requested employees’ confidentiality based on need, not in all interviews

Allen Smith, J.D. By Allen Smith, J.D. March 30, 2017
Company’s Nondisclosure Policy OK Despite Broad Language

​An appeals court recently decided that an employer did not unlawfully ask for employees to keep silent about being interviewed for an investigation, even when HR used a form that said its nondisclosure language was an "introduction for all interviews." Despite what the form said, the HR professional used this nondisclosure language selectively in practice: only during investigations in which she needed to speak to more than one person and in sensitive situations, such as possible harassment.

The form, which contained prepared statements and questions for HR interviewers to read, opened by saying: "I ask you not to discuss this with your co-workers while this investigation is going on, for this reason: When people are talking it is difficult to do a fair investigation and separate facts from rumors."

However, the appeals court struck down the company's confidentiality agreement, which barred employees from sharing information about salaries or employee discipline—an agreement that employees signed when they were new hires.

Mark Kisicki, an attorney for the defendant who practices with Ogletree Deakins in Phoenix, cautioned, "It would be a mistake for employers to conclude that the decision in this case supports any policy or practice of requiring confidentiality during any type or category of workplace investigations."

Hospital Sterilization Practice Opposed, Investigated

James Navarro worked at Banner Estrella Medical Center, run by Banner Health System, in Phoenix, sterilizing surgical equipment.

On Feb. 19, 2011, he could not use a large, pressurized steam sterilizer normally operated for sterilizing reusable medical instruments because the hospital's steam pipe needed to be fixed. He was told to use hot water from the coffee machine in the break room for the first step in the cleaning process and then to use a low-temperature sterilizer with hydrogen peroxide.

Navarro was concerned that those procedures violated established protocol. He raised questions with various supervisors and did some quick research that did not allay his concerns. After confirming that there were adequate clean instruments available for the day's scheduled surgeries and baby deliveries, he did not sterilize additional instruments.

His supervisor was not pleased. A few days later, Navarro visited Banner's HR professional, shared his discomfort with the prescribed procedures and expressed concern for his job. That afternoon, his supervisor gave him a nondisciplinary coaching session; a few days later, his supervisor gave him a negative yearly evaluation.

Navarro filed an unfair labor practice charge with the National Labor Relations Board (NLRB), prompting the board's regional director to file a retaliation complaint against Banner. The regional director amended the complaint to include claims that Banner made employees sign an unlawful confidentiality agreement and maintained an overbroad rule requiring nondisclosure of investigative interviews.

Confidentiality Agreement Struck Down

The administrative law judge (ALJ) held that Banner's confidentiality agreement violated the National Labor Relations Act (NLRA) but that its investigative nondisclosure policy and its treatment of Navarro did not. The NLRB affirmed the ALJ's conclusion that the confidentiality agreement was unlawful but also held that Banner had an unlawful policy of asking employees not to discuss certain types of workplace investigations without performing the required individualized inquiry into the need for confidentiality.

The U.S. Circuit Court of Appeals for the District of Columbia affirmed on March 24 the conclusion that the confidentiality agreement violated the NLRA. "As written, the agreement could chill discussion of quintessential Section 7 information—including salaries and discipline," the court said, referring to Section 7 of the NLRA, which guarantees union and nonunion employees alike the right to protected concerted activity.

[SHRM members-only toolkit: Complying with U.S. Labor Relations Laws in Nonunion Settings]

No Categorical Policy of Requiring Nondisclosure

But the appeals court reversed on the claim that the company had a categorical policy of unlawfully asking employees not to discuss certain kinds of HR investigations. Instead, it found that the HR professional's "testimony identifying sexual harassment and other types of cases where she may ask someone to keep things confidential did not suggest that she necessarily did so in all such cases."

This case is Banner Health System v. NLRB, No. 15-1245.

"There was not sufficient evidence to support the NLRB's determination that Banner Health had instituted a categorical prohibition on disclosure," said Maribeth Meluch, an attorney with Isaac Wiles in Columbus, Ohio. "The court found that the evidence could support a finding that Banner Health was in fact requiring nondisclosure on a fact-by-fact consideration."

While the HR form did not establish a violation, Phillip Wilson, president and general counsel with the Labor Relations Institute in Broken Arrow, Okla., cautioned, "The court didn't find that blanket confidentiality warnings are valid. At this point, the question remains undecided. But the court did suggest that a blanket policy might be found to violate the act."

Michael Lotito, an attorney with Littler and co-chair of the firm's government affairs branch, the Workplace Policy Institute, nevertheless says that he likes nondisclosure policies. "You have to maintain confidentiality to make sure the witnesses are not comparing notes and making their stories consistent," he said. "The investigator wants different impressions to create the picture with 20/20 hindsight as best one can." He added, "When I do a workplace investigation and everyone tells me the same thing, I know people are not being candid. No one sees the same scene the same way."


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