The Flip-Flopping Over Confidentiality Admonitions Continues
To admonish or not to admonish? That is the question - again.
The legality of the confidentiality admonition is once again in question after the National Labor Relations Board’s (NLRB) decision in Stericycle, Inc., 372 NLRB No. 113 (2023).
On the one hand, confidentiality admonitions are a powerful tool for preserving the integrity of an investigation; assuming employees. Assuming employees abide by their terms, confidentiality helps prevent retaliation, testimony fabrication, witness tampering, cover-ups, and the destruction of evidence. The inability to discuss the investigation or allegations makes it difficult for employees to collude about testimony. It disincentivizes ill-intentioned respondents from intimidating witnesses or identifying evidence they might want to destroy. Confidentiality also encourages candor and witness participation in interviews, which leads to more evidence for investigators to consider and rely upon.
On the other hand, some view the prophylactic use of these admonitions as employer overreach with a high potential for abuse by management. Restricting employees’ abilities to communicate with one another can chill union activity and curtail a union’s ability to effectively represent its membership. Confidentiality restrictions can also limit good faith attempts by parties and witnesses to gather more information to either support their position or create a more accurate evidentiary record. The disparity between management’s and union leaders’ access to information about investigations exacerbate the difficulty unions would have in challenging an investigation initiated in bad faith. In the Stericycle decision this past August, the NLRB has signaled that confidentiality admonitions are (once again) out of favor.
This blog post summarizes the history of the confidentiality admonition issue and the key takeaways from the Stericycle decision.
To bring you up to speed, prior to 2012, giving a confidentiality admonition before an interview was the norm. Then, in Banner Estrella Medical Center, 358 NLRB No. 93 (2012), the NLRB held that confidentiality admonitions had to be qualified in certain ways so as not to impinge on protected union activity.[1] In Banner, the NLRB also held that before an employer could use a confidentiality admonition, they needed to first analyze each investigation on a case-by-case basis to ensure they could demonstrate a specific and particularized business need for doing so. This sometimes proved difficult for employers because, at least in the early stages of an investigation, they could not always point to a particularized (rather than general prophylactic) need for confidentiality in each individual case. Then, once an investigation had progressed far enough that the need for confidentiality was clear, if an employer wanted to use confidentiality admonitions in subsequent interviews, it would have to be prepared to explain its inconsistent approach to issuing confidentiality admonitions in later interviews. Perhaps more concerning, employers had to contend with the possibility that evidence might have been tainted or destroyed before it could identify a particularized need for a confidentiality admonition that might have preserved that evidence. The NLRB reaffirmed its decision in 2015.[2]
Four years later, that changed.
The last time we wrote about confidentiality admonitions in 2019, in Apogee Retail LLC d/b/a/ Unique Thrift Store, 368 NLRB No. 144 (2019), the NLRB threw out the requirement that employers analyze investigations on a case-by-case basis. This once again paved the way for general preventive use of confidentiality admonitions, so long as their effect was limited to the duration of the investigation and not applied in a way that clearly interfered with protected union activity.
Four years later, that changed again.
In the most recent 2023 development on this issue, in Stericycle, the NLRB held that in the prior cases, prior Boards used the wrong standard to evaluate the lawfulness of “workplace rules” (which encompass confidentiality admonitions). The current Board majority announced that it is establishing a new standard, built upon the one set forth almost 20 years ago in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004). Under the new standard, an employer’s justification for the rule is “immaterial.” Rather, “workplace rules” must be evaluated “from the perspective of an employee who is subject to the rule and economically dependent on the employer and […] contemplates engaging in protected concerted activity.” If that employee would view the workplace rule as coercive in the sense it would chill employees from engaging in protected concerted activity, the rule is presumptively unlawful. This is true even if there is a contrary, reasonable, non-coercive interpretation of the rule. The only way an employer can rebut this presumption is to prove:
The rule advances a legitimate and substantial business interest;
The business interest outweighs the adverse effect on the interests of employees; and,
The employer is unable to advance that interest with a more narrowly tailored rule.
The new standard will likely make it much more difficult to justify using a confidentiality admonition and will draw renewed and intense focus on the specific language in an admonition. In particular, the third element may prove a challenging hurdle because it essentially requires the employer to prove a negative. Effectively, an employer must be able to prove that there is no way it can tailor the confidentiality admonition language more narrowly (or impose a different rule) and still advance its business interest. Additionally, the lone dissenting NLRB Member’s opinion suggests that it will be practically impossible for an employer to issue a confidentiality admonition in advance of an investigation because it will be unable to show a particularized need for the confidentiality admonition until the investigation is already underway. Conspicuously, while the majority opinion addressed most of the other arguments the dissent raised, it did not respond directly to this point. The majority also did not specifically address whether the confidentiality admonitions at issue in the Stericycle matter were lawful. Rather, it remanded that determination to the Administrative Law Judge who first heard the case for consideration under the newly announced standard.
Takeaway
Private sector employers should be prepared to provide a particularized justification for their use of a confidentiality admonition and wary about issuing the admonition as a general prophylactic measure. For now, the NLRB’s decision is only applicable to private employers. However, California’s public sector equivalent to the NLRB, the Public Employment Relations Board (PERB), usually takes its cues from its private sector cousin. This is especially true when that cue favors employees. In fact, in Los Angeles Community College District (2014) PERB Decision No. 2404-E, PERB adopted the more employee-friendly framework of Banner and never looked back, even after Apogee.
The attorney-investigators at Van Dermyden Makus will continue to monitor this case and employ innovative approaches to preserving the integrity of investigations, regardless of the latest flip (or flop).
[1] In Banner Estrella Medical Center, 362 NLRB 1108 (2015), the NLRB reaffirmed its decision after the United States Supreme Court placed the NLRB’s ruling in controversy because the high court ruled that some of former President Obama’s appointments to the NLRB were invalid. See NLRB v. Noel Canning, 573 U.S. 513 (2014).
[2] Id.
