A few weeks ago, we informed you about the National Labor Relations Board’s (NLRB) recent attempts to find violations of the National Labor Relations Act (NLRA) in commonly used employment policies. In that article, we summarized the NLRB’s take on the legality of social media and other employee communication policies. More recently, we wrote an article describing the NLRB’s belief that federal labor policy trumps federal policy regarding arbitration agreements, and several courts’ rejection of that argument. Now the NLRB has combined these two principles in its most recent decision, Banner Health Systems v. Navarro, which found on July 30 that an employer’s policy of suggesting to employees that they maintain confidentiality during internal investigations was unlawful, even where the employer did not threaten to take disciplinary action if the employee breached confidentiality.

In Banner Health, the employee worked as a sterile processing technician, which required the employee to properly care for and handle all surgical instruments, including sterilizing this equipment. The normal sterilization procedures required the employee to clean the instruments with a machine that uses hot water and steam pressure. One day, however, this machine could not be used because of a broken pipe. When the employee spoke to the department supervisor, the supervisor instructed the employee to use a different machine, which uses hydrogen peroxide at low temperatures to sterilize equipment.

Because the employee did not feel comfortable using the alternative procedure, he conducted his own research and made several inquiries of his co-workers and other employees. A day after receiving the department supervisor’s instructions, the employee had yet to follow through and clean any of the equipment. When the supervisor learned of the insubordination, he called the employee to find outwhy the employee had not done as instructed. The employee expressed his concerns but found no sympathy. The supervisor proceeded to warn the employee that they would discuss his insubordination later.

The next day, the employee met with a human resources representative to discuss the situation. The employee expressed his discomfort with using the alternative sterilization procedures and also expressed concern for his job. As part of the complaint process, the human resources representative asked the employee to not discuss the investigation with others until she concluded the investigation, but she made no threat of discipline for doing otherwise.

The NLRB held that the confidentiality suggestion amounted to a rule that “had a reasonable tendency to coerce employees, and so constituted an unlawful restraint of Section 7 rights,” regardless of whether the employer threatened disciplinary action for breaching confidentiality. The NLRB stated that the employer should have first made a determination “that it has a legitimate business justification that outweighs employees’ Section 7 rights.” According to the NLRB, an employer’s “generalized concern with protecting the integrity of its investigations is insufficient to outweigh employees’ Section 7 rights.” Rather, the employer should have determined whether, in this particular case, it needed to protect witnesses, evidence or testimony or prevent a cover-up, which would presumably justify an instruction to maintain confidentiality.

In his dissent, Member Brian Hayes argued that the human resources representative’s statement to the employee did not represent a workplace rule but was instead a mere suggestion. Absent an “actual work rule with binding effect on employees,” he argued, a violation of the NLRA cannot exist.

Employers would be wise to review their current policies regarding internal investigations and re-evaluate whether any changes are necessary. One prudent first step is to determine whether the employer’s current practice is to require confidentiality during an internal investigation. It is clear from the NLRB’s recent activities, which Banner Health confirms, that the NLRB believes federal labor policy trumps most other legitimate business concerns, including protecting the integrity of an internal investigation. Further, unless an employer is concerned about protecting witnesses, evidence, employee testimony or preventing a cover-up, it appears that the NLRB will not allow such a confidentiality rule to stand. Whether a true “suggestion” to maintain confidentiality will make a difference to the NLRB remains to be seen.