Attorney Investigators
Attorney Investigators
Attorney Investigators

Apogee Retail: Confidentiality Restrictions Are Back in Business

In Apogee Retail LLC d/b/a Unique Thrift Store, 368 NLRB No. 144 (2019), the National Labor Relations Board reversed its prior position on confidentiality restrictions relating to workplace investigations. The Board held that an employer may lawfully maintain such confidentiality restrictions, but only to the extent those rules explicitly apply for the duration of the investigation. The Board also held that, if an employer’s confidentiality rules extend beyond the duration of the investigation, the Board must individually scrutinize whether any post-investigation adverse impact on NLRA-protected conduct is outweighed by the employer’s legitimate justifications.

The Board’s decision overruled Banner Health System d/b/a Banner Estrella Medical Center, 362 NLRB 1108 (2015), an opinion that demanded a case-by-case determination of whether confidentiality can be required in a specific investigation. In Banner, the Board found that an employer could only lawfully require employee confidentiality if the employer supplied specific evidence that, in a given investigation, (i) witnesses needed protection; (ii) evidence was in danger of being destroyed; (iii) testimony was in danger of being fabricated; and (iv) there was a need to prevent a cover-up.

1. Apogee Retail’s Factual Background

At issue in Apogee Retail were two separate provisions that addressed confidentiality in workplace investigations:

  • One rule required that employees “cooperate fully in investigations and answer any questions truthfully and to the best of their ability.” Complaining parties and witnesses were also “expected to maintain confidentiality regarding these investigations.”
  • The other rule listed behaviors that could result in disciplinary action and included the “unauthorized discussion” of an investigation or interviews “with other team members.”

2. Apogee Retail’s Rejection of Banner and Application of Boeing

In Apogee Retail, the Board expressly overruled Banner because it failed to balance employee and employer interests; Banner instead assigned a “value of zero” to an employer’s investigation confidentiality interests while requiring the employer “to sustain an unduly onerous burden of proof” to justify confidentiality.

To replace the Banner test, the Board used the analysis it announced in The Boeing Company, 365 NLRB No. 154 (2017). Boeing established a balancing test to analyze facially neutral rules that would potentially interfere with the exercise of employees’ Section 7 rights. Under Boeing, the Board designates such rules into three categories:

  • Category 1: rules that the Board deems lawful;
  • Category 2: rules that require case-by-case scrutiny and weighing the employer’s interests against the impact on Section 7 rights; and
  • Category 3: rules that the Board deems unlawful.

Applying Boeing, the Board found that investigative confidentiality rules that are similar to Apogee Retail’s, and also explicitly limited to open investigations, would fall into “Category 1” and be deemed “categorically lawful.” The Board recognized that such confidentiality rules could potentially interfere with the exercise of Section 7 rights, but in Apogee Retail’s case, it determined that impact was relatively slight compared to the employer’s substantial business justifications. Specifically, the Board acknowledged the importance of protecting employee privacy, reducing the risk of retaliation, ensuring the integrity of an investigation, and mitigating theft or other misconduct by conducting prompt investigations.

In weighing whether such considerations outweighed the impact on employee rights, the Board specifically noted that Apogee Retail’s rules narrowly prohibited only investigation participants from discussing the investigation or interviews with other team members. The rules did not more broadly restrict employees from discussing the underlying events, workplace issues generally, or disciplinary policies or procedures. The Board also observed that the rules at issue did not prohibit a union-represented employee from requesting the help of a union representative.

However, because Apogee Retail’s rules were silent as to the duration of the confidentiality requirement, the Board found that employees would reasonably interpret these rules as not limited to the pendency of the investigation. Thus, as written, the rules fell into “Category 2” and required individualized scrutiny as to whether any post-investigation adverse impact on NLRA-protected conduct was outweighed by legitimate justifications. The Board remanded the case for that evaluation.

3. Takeaways from Apogee Retail

This decision provides private employers an opportunity to reevaluate their use and phrasing of investigation-related policies. As the Board recognized, requiring confidentiality in investigations may have numerous benefits for employers and employees alike, and employers now have more room to consider those merits and implement such rules.

For public employers, however, Apogee Retail has little impact. Public sector employers remain subject to a 2014 decision by the California Public Employment Relations Board (PERB), which holds that a broad confidentiality directive violates employee rights.