NLRB Again Makes It Harder for Employers to Manage Their Workforces

It's no secret that the National Labor Relations Board has been on a crusdade over employer investigations. The last several years have seen decisions that make it much more difficult for an employer to conduct workplace investigations, both in the union and non-union context.

Specifically, in 2014 in a case known as Fresh and Easy, the Board determined that a complaint by an individual employee relating to a personal Title VII issue (something that had little or nothing to do with the National Labor Relations Act) that triggered an employer investigation, somehow subjected that investigation to the full panoply of NLRA restrictions and requirements applicable to protected concerted activity.

Similarly, in a 2015 decision, Banner Estrela, the Board hamstrung an employer's attempt to preserve the integrity of an ongoing workplace investigation by determining that a confidentiality instruction to employees involved in the investigation violated their rights under Section 7 of the Act.

The Board continues its efforts to make it virtually impossible for an employer to conduct an effective internal investigation with its latest decision in American Baptist Homes of the West. In this case, the Board overruled a long-standing determination that employers were normally allowed to withhold from the union confidential employee statements collected as part of an investigation.  Instead, employers are now required to do a case-by-case assessment of whether there is: a risk of retaliation against the employee, a high potential for witness fabrication of evidence or destruction of evidence, and similar factors, before the employer can even offer confidentiality to a prospective employee witness.

As the dissent notes, this will greatly reduce the likelihood that an employee will even talk to an employer. Most employees in a union setting are well aware of the danger for retaliation by their coworkers in a situation where they are seen to be helping the company. Until the employer hears the employee's report, it will be impossible for the employer to determine whether the circumstances are such that one of the very narrow Board standards for non-disclosure will even be met. In other words, an employer cannot offer confidentiality to a reporting employee upfront, and without that offer of confidentiality, most employees will simply elect to keep quiet rather than risk making statement that will put them in a bad position with their union leadership.

There's no question that the Board's holding damages an employer's ability to manage its workplace and its employees. It is yet another reason why the stakes on unionization of the workforce get higher each year. With the Board working to effectively limit management's ability to discover what is happening in its workforce, it is more likely that employers will simply move to workforces that cannot be unionized - independent contractors, part time employees, and task-duration hires, that are less secure and potentially pay less.

The Continuing Regulatory Attack on an Employer's Ability to Conduct Internal Investigations

As I've commented before, federal employment and labor regulatory agencies have been working overtime in the last several years to limit the rights of employers in a variety of settings, and perhaps in no area more than the conduct of internal investigations.

In the latest attack on an employer’s ability to run internal investigations as it sees fit, the NLRB overturned decades of precedent and now requires employers to provide unions with confidential witness statements taken during the course of a disciplinary investigation. Of course, the Obama Board members are fully aware of the chilling affect their decision will have on an employer’s ability to find out what happened in policing its own workplace. In particular, in grievance arbitrations (which  is what this decision pertains to), pre-hearing production of witness statements is likely to diminish rather than bolster the integrity of the grievance and arbitration process because of the potential for witness coercion and intimidation by union co-workers. Moreover, once witnesses being interviewed by the employer understand that the employer will be required to provide their names and statements to the union prior to the hearing, it would not be unusual for witnesses to simply to refuse to make such a statement or to talk to the employer.

The danger of witness intimidation or coercion is not fanciful --- in fact, the Board has long protected statements from witnesses that it collects in an unfair labor practice proceedings, shielding those statements from the employer until the witness actually testifies. Why this same protection should not be extended to employers' witnesses at grievance proceedings is unclear from the Board’s opinion.

Nevertheless, union employers seeking to arbitrate grievance proceedings must now factor into their process that they cannot guarantee witnesses confidentiality prior to the hearing.

The Board’s decision makes it much more difficult for employers now charged with protecting employees and avoiding liability by maintaining workplace safety and identifying and addressing workplace violence, bullying, or sexual or racial harassment.  Revealing witnesses' names and statements to co-workers will likely reduce candid, truthful statements from potential witnesses. Coupled with EEOC’s determination in that a blanket policy prohibiting witnesses from talking to other employees during the pendency of an investigation is per se retaliatory, this NLRB decision further erodes an employer’s ability to talk frankly with its work force to ferret out and correct employee misconduct.

UPDATE:  This decision, along with numerous others, apparently has now been invalidated (pending appeal) by the DC Court of Appeals opinion referenced here.

The End of Workplace Investigations As We Know Them?

Quite possibly, if a federal court upholds the latest NLRB opinion.

It is generally a caveat of an internal workplace investigation that participants in the investigation, whether they be victims, witnesses, or targets of the investigation, are not to discuss the matter under investigation or the investigation itself with their coworkers until the investigation is completed. The reasons for such a requirement are obvious: knowing that an investigation is in progress, and its focus, creates a very real prospect of witness accounts being altered, fabricated, or coerced, evidence being destroyed, or other steps taken to frustrate the employer's ability to get an accurate picture of what actually occurred.

But the NLRB finds that this routine instruction, which is often key in sensitive investigations such as those surrounding sexual harassment complaints, is a violation of the National Labor Relations Act. Specifically, a majority of the Board determined that prohibiting employees from discussing an ongoing investigation with their coworkers interfered with the employees' rights to engage in "protected, concerted activity".

As I have noted previously, federal employment agencies such as the EEOC and NLRB are working to eliminate general workplace rules by which management has functioned for decades. Instead, the agencies are forcing employers into specific, fact-finding exercises that must occur before any workplace policy is put into actual effect. Here, the Board required the employer to make a specific determination as to whether any given witness in the investigation needed protection, whether testimony was in danger of being fabricated, or whether there was a need to prevent a cover-up. Absent specific determinations by the employer (presumably reviewable by the Board with the benefit of perfect hindsight) that such danger was present, the "no discussion" rule was a violation.

Of course, it is frequently impossible to determine at the outset of an  investigation (when such instructions are typically given) whether there is a danger of a cover-up, witness fabrication, or other risks. Often by the time such a determination can be supported with actual evidence, it's too late because employees have modified their stories in response to the questions they know are coming, e-mails have disappeared, and employees have colluded on their version of events.

If this interpretation is upheld, it means that employers will have to make some type of record as to the various bases they have for keeping an investigation confidential, and the facts to support those bases.  The decision represents yet another highly intrusive move by the Board into the workplace of most US businesses.