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An aggressive confidentiality policy could find you on the wrong side of a host of laws. An employment agreement that limits what information employees can share with investigators may constitute unlawful "pretaliation," according to the SEC. Even severance agreements that explicitly allow for certain disclosures can violate Dodd-Frank's whistleblowing rules.
And that's not all. According to a recent article in Inside Counsel, your company's confidentiality rules could also be unlawful under the National Labor Relations Act if they limit workers' ability to talk to each other about internal investigations -- even if your workplace is not unionized.
Confidentiality Agreements vs. Labor Law
The fact pattern goes something like this: Someone in your company is accused of sexual harassment, or theft of trade secrets, or safety violations, or whatever. An internal investigation is opened. Employees are interviewed. Afterwards, they're told to keep the investigation confidential, including not sharing any information regarding the investigation with their coworkers.
Sound familiar? It's a common practice, but it's also one that could violate the NLRA. That's because, as Daniel Altcheck notes in Inside Counsel, Section 7 of the NLRA "gives employees the right to discuss discipline or disciplinary investigations involving their fellow employees -- whether or not they are represented by a union."
Time to Trash Your Confidentiality Agreements?
Now, just because the NLRA treats discussing discipline as a projected activity, that does not mean that all restrictions on such discussions are forbidden. The NLRB allows for restrictions on Section 7 rights when they are supported by a "legitimate and substantial business justification."
"A blanket policy requiring confidentiality in all internal investigations -- or all investigations 'of a particular type' -- does not satisfy this test," Altchek writes. Instead, for every particular investigation, an employer must show that there are "objectively reasonable grounds for believing that the integrity of the investigation will be compromised without confidentiality."
So, you don't need to throw your confidentiality rules in the trash just yet. But you should try to make sure they're narrowly employed and tailored to the needs of each investigation. Would allowing employees to discuss alleged fraud lead to the destruction of evidence? That is possibly enough to justify a confidentiality requirement. Could it result in reputational harm? Whether that is enough to justify a confidentiality requirement is a more difficult question.
If you do require confidentiality, however, make sure the reasons supporting it are well documented, lest your internal investigation lead to an NLRB investigation.
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