In the Trenches: Confidentiality agreements: What's OK and what's not

Dec. 1, 2015
In this edition of In the Trenches, good intentions don't necessarily make a confidentiality agreement legally sound.


Maureen’s boss had come into her office, ostensibly to share the news that Acme Co. just beta-tested its FlibFlab 3000 to outstanding reviews. The new device looked to be a game-changer, and it was generating a lot of excitement for the company. The successful launch of the FlibFlab also was sure to be a career boost for Maureen, Acme’s associate director of product management.

“Let’s plot the go-to-market strategy at dinner—if you know what I mean,” Oscar Oafish said, laughing, in his creepy-innuendo tone. He then walked behind her desk and began to rub her shoulders. “Geez, you’re tense, pretty lady. Maybe we should make it drinks instead.” With this, Oscar left, squeezing past Rhonda, who stood in the doorway. “Ewww,” said Rhonda. Maureen’s assistant had witnessed the exchange. “Oscar’s at it again, I see. He is so gross.”

Maureen’s skin was crawling. She’d finally had it. Oscar had been coming on strong and making her work life miserable. And she knew she wasn’t the only female employee who has had to put up with his harassment. Putting him off politely simply didn’t work. She placed a call to human resources and was directed to Donna Discreet, Acme’s EEO director.

Pursuant to Acme’s standard protocol, Donna informed Maureen that HR would investigate her complaint, including interviewing Oscar and others in the department who may have witnessed the alleged misconduct. Then she had Maureen sign the confidentiality form required of all participants in an investigation. “In order to ensure the integrity of the investigation into this sensitive human resources matter and to protect all parties involved, you are to refrain from discussing the incident under investigation or any details of the ongoing investigation,” the form stated.

The next day Maureen watched nervously as Rhonda and the others—including Oscar—were summoned to HR. Rhonda returned after half an hour, somber, offering Maureen a knowing glance. Soon thereafter, Oscar entered quietly. He headed straight to Maureen’s office.

“I’m not sure what you think happened here,” he said matter-of-factly. “But don’t flatter yourself.” Upon leaving, he turned to Rhonda. “Is this your so-called ‘witness’? Did she drag you into this little witch hunt?” Rhonda stood silent. “I have the right to know who is accusing me!” he said, his anger rising. Maureen steeled herself and intervened on behalf of her assistant. “Oscar, HR investigations are confidential. You know that.”

“I’ll find out who else in my department is defaming me. If you don’t tell me, and if HR won’t tell me, my lawyer will find out!” With that, he stormed out.

A week later, Donna got a call from Acme’s general counsel. “We’ve just received a formal charge from the government about the Oafish incident.”

“What? I can’t believe Maureen filed an EEOC charge. I responded to her complaint immediately and we’re still investigating.”

“Not an EEOC charge—a National Labor Relations Board charge. They say we broke the law because we tell employees not to talk about HR investigations.”

“You have got to be kidding me.”

As it turns out, Oscar did get a lawyer—who advised his client to file an NLRB “unfair labor practice” complaint.

Before we delve further, first, an important clarification: Employers often mistakenly believe that if there is no union at their company, then the National Labor Relations Act (NLRA) doesn’t apply to them. In fact, the statute applies to both unionized and nonunion employers. It’s worth noting, too, that in recent years, the National Labor Relations Board (NLRB), which enforces the statute, has increasingly exerted its authority over nonunion employers. The agency has been scrutinizing nonunion companies’ employee handbooks, their mandatory arbitration agreements, and even company policies such as this one—and finding violations of the NLRA.

Meanwhile, cognizant of the NLRB’s activities in this area, some plaintiff’s attorneys have been bringing complaints to the Board for strategic reasons. Here, it looks like Oscar’s savvy lawyer is doggedly looking out for his client’s interests—with an assist from the federal government. He knows that the NLRB frowns upon employers prohibiting employees from talking about HR investigations with coworkers.

It may be counterintuitive, but it’s true. Employers want to ensure the integrity of sexual harassment investigations and protect the complainant(s) and other witnesses from intimidation or retaliation. Yet they can’t always demand confidentiality while they try to get to the bottom of what happened.

Under the NLRB's current interpretation of the law, confidentiality policies regarding HR investigations violate the NLRA. The statute protects employees when they are engaged in “concerted, protected activity” for their “mutual aid or protection.” It’s unlawful for employers to interfere with that concerted, protected activity, and according to the Board’s reasoning, restricting workers from talking to each other about HR investigations is interference. Therefore, an across-the-board confidentiality policy for HR investigations is unlawful.

However, the NLRB does recognize there may be occasions when an employer has a business justification for demanding confidentiality in a particular investigation—such as when a witness needs to be protected, the employer suspects a cover-up, or witnesses appear to be fabricating their accounts of what happened. In such circumstances, the business need may trump employees’ protected rights. To satisfy the NLRA requirements, it’s not enough to vaguely assert such concerns, though; an employer has to present specific evidence that such circumstances are in play to impose a confidentiality requirement during a specific investigation. The employer has to consider on a case-by-case basis whether confidentiality is to be imposed.

It might also seem surprising that the EEOC dislikes blanket confidentiality policies. However, making sexual harassment complaints is also protected under Title VII, the federal antidiscrimination statute, and blanket prohibitions on discussing allegations of harassment can run afoul of employees’ Title VII rights. As the EEOC has stated, an employer cannot implement a policy that would make an employee think he or she would be subject to discipline or discharge for contacting the EEOC about harassment “if that harassment is being or has been investigated internally by your organization.” The EEOC doesn’t want employees to fear filing their own charge—or supporting a co-worker in opposing harassment.

As Maureen is aware, she was likely not the lone victim of Oscar Oafish. And if Acme’s mandate to keep quiet about the investigation would deter other potential complainants from discussing their common plight together, then the NLRB and the EEOC would not be pleased.

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