Regulators Challenge Confidential Internal Investigations

Experts say employers should determine confidentiality on a case-by-case basis to avoid liability.

whistleblowerWhen James Navarro arrived at his job as a medical equipment technician one morning in February 2011, something wasn’t right. Due to a broken water pipe in the Arizona hospital where he worked, employees didn’t have steam and hot water to follow their normal protocol for sterilizing surgical equipment. Navarro’s supervisor instructed him to use a different sterilization machine and get hot water from the break room coffee maker. Concerned about patient safety, Navarro refused to follow his supervisor’s instructions and complained about the problems to his co-workers.

The supervisor reported Navarro to human resources. Finding that Navarro had been insubordinate, the hospital issued him a nondisciplinary coaching. Shortly thereafter, Navarro received a subpar performance review.

Balancing Analysis

Banner had a policy that it required all employees to sign upon hire acknowledging that disciplinary investigations are confidential and that employees could be disciplined or discharged for failing to maintain confidentiality. The NLRB decided that this policy was too broad and would have the effect of barring employees from discussing workplace grievances with one another or union representatives in violation of the labor laws.

Overlapping Concerns

The decision is of major concern to employers because a host of different laws, including Title VII of the Civil Rights Act of 1964, the Sarbanes-Oxley Act, securities laws and the Foreign Corrupt Practices Act, require companies to conduct investigations when they receive a report of wrongdoing. For instance, when confronted with allegations of sexual harassment, Title VII imposes liability if the employer does not conduct a thorough investigation and take prompt remedial action.

Broader Application

Although NLRB decisions are not binding precedent in courts considering claims that don’t concern a union, there are indications that there is momentum for applying the NLRB’s logic outside of the unionized workforce context.

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Originally published on InsideCounsel. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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