Overbroad At-Will Disclaimers and Confidentiality Requests Are Being Challenged in Non-Unionized Workplaces

As I have commented on the positions the National Labor Relations Board has taken on social media policies in the recent past, I figured this article would be of interest to my blog readers. Originally published in my firm’s Workplace Word Newsletter, this article identifies the new trend in cases enforcing Section 7 rights of the National Labor Relations Act: striking down overbroad at-will disclaimers and confidentiality request.

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The Acting General Counsel of the National Labor Relations Board (NLRB) has taken some unexpected and troubling positions against Arizona employers that should cause all employers nationwide to take notice. Over the past several months, the Acting General Counsel has challenged commonplace terminology in at-will policies and has also opposed the practice of requiring employees to maintain the confidentiality of an internal investigation.

The claims are based on the premise that prohibiting employees from changing the at-will nature of their employment, or discussing the terms and conditions of their employment, could interfere with their rights protected by the National Labor Relations Act (NLRA or the Act). More specifically, the actions alleged the companies interfered with, restrained and/or coerced employees in the exercise of the rights guaranteed by Section 7 of the Act, in violation of Section 8(a)(1) of the Act.

Section 7 protects union and non-union employees, and states that“[e]mployees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities.”

At-Will Policies
The Board’s Acting General Counsel brought an action against Hyatt Hotels (the Company) alleging the Company engaged in a variety of unfair labor practices, including that it maintained an overbroad and discriminatory social media policy, Code of Business Conduct and Ethics, and non-disparagement policy. One of the most unexpected allegations the Acting General Counsel raised is that the Company’s at-will policy and acknowledgment form ran afoul of the NLRA. In particular, the acknowledgment form stated “no oral or written statements or representations regarding my employment can alter my at-will employment status, except for a written statement signed by me and either Hyatt’s Executive Vice-President/Chief Operating Officer or Hyatt’s President.”

Employers began inserting language similar to the above-referenced policy to protect against employees claiming that errant comments from supervisors, or assurances from individuals who did not have authority to bind the Company, somehow transformed their at-will employment into one set for a specific term. The disclaimers were inserted to make clear that one’s employment status is not so easily changed from at-will and claims should not survive past summary judgment simply because an employee claims to have been told that he or she is no longer an at-will employee.

Hyatt entered into a settlement and agreed to rescind numerous policies, including the wording of the at-will acknowledgment form. Therefore, it is not clear how the Board would have treated the claims brought against the Company. However, an administrative law judge (ALJ) ruled earlier this year that a statement in the American Red Cross (Arizona Blood Services Region) handbook was overly broad and discriminatory as it stated the at-will relationship “cannot be amended, modified or altered in any way.” The ALJ believed the language would chill an employee from exercising his or her Section 7 rights.

Although the decision in the American Red Cross case came from an ALJ and not from the Board itself and, therefore, we do not know how the Board would have decided the case, it is clear that such policies are “high risk,” at least with regard to the rights protected by the NLRA. This is particularly troublesome since the policies in question are standard policies, similar to numerous others that have been used without question for many years.

At-will policies are still necessary and acceptable, and informing an employee of his or her status is permissible. By no means should companies abandon their at-will statements altogether, but they should carefully craft their at-will statements to comply with even the strictest reading under the NLRA.

Policies should not discourage employees from unionizing or altering their at-will status through collective bargaining. Accordingly, companies should consider whether broad disclaimers addressing the NLRA, or more narrow restrictions of specific policies, should be adopted.

Confidentiality Requirements
The Acting General Counsel has also taken a closer look at confidentiality requirements (e.g., when a human resources representative interviews an employee as part of an investigation into claims of discrimination and asks the employee to keep the conversation and investigation confidential). In a matter brought against Banner Estrella Medical Center (the Medical Center), the Board explained its concern that protecting the integrity of an investigation may be insufficient to outweigh the potential effect a confidentiality requirement has on the employees’ Section 7 rights.

On July 30, 2012, the Board issued an Order finding the Medical Center did not discriminate or retaliate against a particular employee. However, the Order continued to find that a human resources representative’s request— that employees making a complaint not discuss the matter with their coworkers while the investigation was ongoing—was in violation of the NLRA.

The Board explained that “[t]o justify a prohibition on employee discussions of on-going investigations, an employer must show that it has a legitimate business justification that outweighs employee’s Section 7 rights.” In past cases, the Board has not found a legitimate justification where employers took a “blanket approach” and employees were routinely prohibited from discussing matters under investigation. The Board explained that the Medical Center needed to evaluate whether: (1) any investigation witnesses needed protection; (2) evidence was in danger of being destroyed; (3) testimony was in danger of being fabricated; or (4) there was a need to prevent a cover up.

The Board found that the Medical Center violated Section 8(a)(1) of the NLRA since it believed the statements made by the human resources representative “had a reasonable tendency to coerce employees, and so constituted an unlawful restraint of Section 7 rights.” As a term of the Order, the Medical Center is prohibited from maintaining or enforcing the rule that employees may not discuss with each other ongoing investigations of employee misconduct.

Balancing the NLRB’s concerns with chilling an employee’s exercise of his or her Section 7 rights, and the employer’s concerns with requesting confidentiality, is difficult in this instance. Employers have legitimate concerns that employees will be hesitant to tell the truth if there is no confidentiality, or that employees may tip-off someone who will fabricate information, influence others or, in the worst situation, improperly destroy documents or other evidence.

At a minimum, if confidentiality is requested, there should be limitations. Investigations should be analyzed on a case-by-case basis and, for those investigations where confidentiality is necessary,  reasonable limits should be put on the length of time confidentiality is requested. Employees can be asked to keep their conversations on a need-to-know basis. Understanding the risk, some employers are choosing to continue requiring confidentiality as they are concerned that employees will influence other employees/witnesses during on-going investigations.

One thing is certain: there is increased scrutiny on companies that restrict their employees’ ability to engage in concerted activities. Even if a company does not realize its policies have such an effect, the NLRB is taking notice. Earlier this summer, the NLRB launched a webpage discussing protected, concerted activity. While non-union employers typically do not consider the actions of the NLRB to be relevant to their operations, non-union concerted activity, in fact, accounts for more than 5 percent of the agency’s recent caseload.

In light of these issues, companies should review their policies and practices. Even routine provisions and restrictions need to be reconsidered as the enforcement priorities of the NLRB appear to be changing.

*NLRB image from- http://www.nlrb.gov/

About Ashley Kasarjian

Attorney at Snell and Wilmer in Phoenix, Arizona, and publisher of the blog, Employment and the Law.
This entry was posted in Other Things..., Social Media and tagged , , . Bookmark the permalink.

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