Confidentiality and Internal Investigations:

Attacks by NLRB and EEOC

Employers conduct internal investigations for a variety of reasons. Sometimes it is an on-going internal audit to promote compliance. Other times the investigation is the response to a complaint, inventory shortages, rumor, or in anticipation of litigation. Often times in healthcare situations, it is part of the peer review process and involves confidential HIPAA information.

In most of these scenarios, the employer wants to keep the investigation confidential until all witnesses are interviewed and evidence gathered and preserved. This makes for more accurate and complete investigations, less collusion among witnesses, less disruption of the workplace, and serves to maintain the privacy of both the accuser and accused, as well as cooperating witnesses within and without the company.

It is common for the company to instruct each person involved, “Please keep this confidential until the investigation is complete.”

That direction is now under attack.

A.  THE NLRB ATTACKS CONFIDENTIALITY

In a ruling that applies to both union and non-union employers, the National Labor Relations Board recently declared that an employer must establish a specific legitimate business justification for requiring employees to maintain confidentiality during internal investigations of employee complaints. In Banner Health System d/b/a Banner Estrella Medical Center, 358 N.L.R.B. No. 93 (2012), the NLRB held that a blanket employer rule prohibiting employees from discussing ongoing investigations of employee misconduct would violate Section 7 of the National Labor Relations Act, which protects employees’ rights to engage in “concerted activities” for their mutual aid and protection, regardless of whether the employees belong to a union.

The employer’s “Interview of Complainant Form” included a general instruction that employees making internal complaints should not discuss their complaints with coworkers during the investigation. The human resources consultant also routinely asked employees making a complaint not to discuss the matter with their coworkers while the Respondent’s investigation was ongoing.

B. EEOC FIELD OFFICE LETTER

On August 3, 2012, the EEOC Field Office in Buffalo issued a letter warning an employer that a policy prohibiting workers from discussing an ongoing internal investigation of harassment was unlawful under Title VII. The employer allegedly told several women complaining of harassment, not to discuss with others the alleged harassment. The EEOC speculated that this could lead an employee not to complain to the EEOC for fear of discipline.

Of course, a letter from an EEOC field office is not yet an official policy adopted by the EEOC.

C. HOW TO RESPOND

The confidentiality of investigations resulting from threatened or actual litigation, or government enforcement, could likely be protected by attorney-client or attorney work-product privileges.

I expect that the NLRB and EEOC pronouncements on internal investigations will both be clarified and scaled back by either the agencies or the courts. There are simply too many other concerns in play during an internal investigation to justify such sweeping prohibitions, including employer efforts to preserve confidentiality during an investigation in order to prevent harassment or retaliation against complaining parties and to limit employer liability for slander and defamation claims.

In the interim, employers would be prudent (a) to carefully review with counsel any written confidentiality provisions in company complaint forms and compliance programs, (b) to consider the duration and scope of the confidentiality instruction, and (c) to script at the beginning of any internal investigation the exact confidentiality warning and justification that is to be repeated to witnesses and complaining parties.

Particularly in the healthcare setting, many compliance programs place a premium on transparency and normalcy; stressing that compliance investigations are not judgmental and not discipline in order to promote cooperation and disclosure. Although patient confidentiality is to be maintained, blanket instructions to employees to keep confidential such compliance efforts are often not consistent with the compliance program’s goals of group review.  Similarly, TPO (Treatment, payment or healthcare operations) functions involving use and disclosure of confidential information do not require a separate release or consent form and over-broad confidentiality instructions to employees are not necessary for a healthcare provider to perform the TPO functions.

If practical steps can also be taken to minimize the risk of NLRB or EEOC challenges, most employers will still want to err on the side of protecting confidentiality during internal investigations for a variety of legitimate concerns.