Investigations of employment-related claims routinely require employee interviews. Reports of sexual harassment, picket line misconduct, or whistleblowing all trigger such investigative interviews. Conventional wisdom suggests that employers and their counsel should ask the interviewees to maintain what is covered in confidence and even to document that confidentiality commitment in writing. But, developments on multiple fronts invite a reconsideration of that conventional wisdom.The National Labor Relations Board. Recent case law at the NLRB holds that requiring employees to keep internal investigations confidential is unlawful. For instance, in Boeing Co., 362 NLRB No. 195 (Aug. 27, 2015), the NLRB held that prohibiting employees from discussing investigations by the company’s human resources department was an unlawful restraint on employee rights and that even recommending that the employees maintain confidentiality was unlawful. While the NLRB allowed that it might make exceptions in limited cases, it set a daunting standard for such exceptions: i.e., the employer would need to establish that “witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, and there is a need to prevent a cover up.”
The Securities and Exchange Commission. SEC Rule 240.21F-17(a) states that no one may “take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement … with respect to such communications.” Earlier this year, the SEC fined KBR, Inc. for requiring employees to sign a form confidentiality statement, whereby the employee acknowledged that, if they were ever involved in an internal investigation, they would be “prohibited from discussing any particulars regarding this interview and the subject matter discussed… without the prior authorization of the Law Department.” In an agency press release, the SEC heralded the company’s voluntary change to its confidentiality agreement to affirmatively Mirandize employees by advising them of their right to report directly to the SEC.
Equal Employment Opportunity Commission. The EEOC follows where the NLRB and the SEC have led. Although Title VII’s anti-retaliation provision, as written, protects employees or applicants after they have engaged in protected activity, the EEOC is advancing a theory of “anticipatory retaliation” to find an employer liable for limiting employees before filing a charge, testifying, assisting, or participating in an investigation or hearing. To date, the EEOC has focused on pressing its attack on confidentiality clauses in the releases routinely utilized in deals with departing employees but that theory will likely be adapted to follow the NLRB’s lead.
All of this requires a rethinking of longstanding tradition and practice. Let’s consider the alternatives:
Option 1. The most conservative approach is to notify each witness that the contents of the interview are to be held in strict confidence, but that the employee nevertheless has the right to report to the NLRB, the SEC, the EEOC, or any other governmental agency, as permitted by law. The benefit to this approach is that the company will more likely have fully satisfied some of the agencies’ directives (but probably not all of what the NLRB wants). The obvious drawback, however, is that the company will have suggested to the employee that he/she may have something to report (which 21st century employees will understand means a potential legal claim and recovery).
Option 2. A minor modification of the above approach is to avoid explicitly mentioning the agencies by name, but to simply say that “the confidentiality restriction does not prohibit [the witness] from reporting to government agencies, as permitted by law.” This approach straddles the requirement by both opening the door to an employee’s right to report without proclaiming that the particular agency is an appropriate reporting conduit. It avoids the more onerous Miranda warning litany but remains subject to
challenge by enforcement agencies (and let’s not forget the Department of Labor who may join the parade).
Option 3. The investigator could forego the confidentiality statement altogether. The risk, of course, is that, without a confidentiality notice, the employee may feel free to communicate the meeting and its contents to third parties. But, that is a risk regardless: the fond assumption that employees will maintain confidentiality only if that is said in a signed document is a proposition that lawyers believe in but that is scientifically untested. The benefit, however, is that the company would have complied with the agencies’ requirements by not deterring the employee from reporting to outside agencies, while also not announcing the employee’s right to report.
Option 4. The investigator could bifurcate the types of information at issue or the employees being interviewed: i.e., using confidentiality agreements with some employees only and then for only certain information. Whatever appeal this may have in ivory tower analysis, it is exceptionally impractical; drawing lines more nice than obvious on the fly is asking too much of even good investigators. Besides, this splitting the baby merely yields a solution that invites legal challenge.
Option 1 is the equivalent of putting a kick-me sign on the entity’s back. Option 4 is too convoluted to be useful. Options 2 fails to fully satisfy what enforcement agencies appear to desire. Option 3, in comparison, appears promising but will require reconsidering traditional practices and conventional wisdoms. But, changes to adapt are often necessary. See, Johnson v. U.S., 576 U.S. __ (2015)(“The doctrine of stare decisis permits us to revisit an earlier decision where experience with its application reveals that it is unworkable”).