Will The NLRB's Protection Of Water Cooler Conversations Trump A Company's Right To Keep Its Investigations Confidential?
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Over the past year, the National Labor Relations Board has issued a series of decisions that have significantly expanded the rights of non-supervisory employees, including non-unionized employees, to discuss information that many employers would consider confidential, and even post this confidential information on social media sites. This expansion includes an employee’s right to discuss the content of investigative interviews, even when an employer directs an employee to keep the interview confidential. Although the NLRB has yet to directly opine on the subject, these decisions may have serious implications for the corporate attorney-client privilege.Section 7 of the National Labor Relations Act protects the rights of non-supervisory employees to engage in “concerted activities for the purpose of . . . mutual aid or protection.” Essentially, this means that an employer may not discipline or terminate an employee for talking to his co-workers—“water cooler conversations”—regarding the terms and conditions of their employment.
On July 30, 2012, in Banner Health System, 358 NLRB No. 93, the NLRB held that an employee’s discussion of the subject matter of an internal investigation could be considered protected employee speech, and thus it was improper for an employer to adopt a blanket rule requiring employees to keep the details of internal investigations confidential. As a practical matter, the employer must determine, on a case-by-case basis, whether a “legitimate and substantial justification” exists for requesting confidentiality from its employees,Hyundai Shipping Agency, Inc., 357 NLRB No. 80 (2011), in order to “minimize the impact” of internal investigations on “Section 7 rights.” Banner Health System, 358 NLRB No. 93.
Although the impact of Banner Health is significant for any employer conducting an internal investigation, it became even more significant on December 14, 2012, when the NLRB decided Hispanics United of Buffalo, Inc., 359 NLRB No. 37. Hispanics United solidified the NLRB’s position that postings on social media can be protected water cooler conversations. In that case, several employees defended themselves against a co-worker’s criticisms by posting on Facebook. They were then terminated for “bullying and harassing” the co-worker. Even though their Facebook posts did not reference any group action or attempted communications with management, the NLRB found the posts were protected as the “first step toward taking group action,” and reinstated the employees.
Many commentators have complained that these decisions threaten the integrity of internal investigations by undervaluing an employer’s interest in confidentiality. And, indeed, this seems to be the case. The disclosure of any number of items being investigated by an employer can have an immediate and significant impact on a company. Consider, for example, the possible effect on a corporation’s stock price if employees were free to post on their Facebook page the details of the company’s internal investigation into allegations of accounting fraud or insider trading.
In addition to raising concerns regarding the disclosure of damaging facts, the NLRB’s position, when taken to its logical extreme, threatens to undercut the employer’s attorney-client privilege. The American Bar Association’s 2009 “best practices” for internal investigations recommends that attorneys admonish the employees they interview “not to disclose the substance of this interview to any third party, including other employees or anyone outside the company.” In a situation where an employee inadvertently or intentionally discloses privileged information discussed in an interview, the ABA’s suggested instruction can protect a company against a claim that its privilege has been waived. The company can argue that it instructed the employee to maintain the confidentiality of the information and any breach of that confidentiality was not authorized, undercutting a claim of waiver.
The recent trend in NLRB decisions may be on a collision course with the ABA’s approach. To be fair, the NLRB did not consider the attorney-client privilege in Banner Health, presumably because the case involved investigations conducted by a human resources consultant, not an attorney. But even though the NLRB has recognized that an employer may restrict discussion of an ongoing investigation based on a “legitimate and substantial justification,” this balancing test does not provide assurance that the employer’s attorney-client privilege will prevail over an employee’s now fairly extensive right to protected water cooler discussions. Consider an investigation into a serious Occupational Safety and Health Act violation, where the lives of employees are at risk. Might the NLRB find that the corporate privilege should yield, or at least be narrowed, so that employees can band together to protect their own safety? And if the privilege could be breached in this context, in what other contexts could the NLRB determine that an employee’s rights trump the company’s interests in confidentiality? Who then will really be in control of the employer’s attorney-client privilege?
To read more from Catherine Foti, please visit www.maglaw.com
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