Nonprofit Labor Pains: 'Confidential' Investigations Create Legal Risk

Are you looking for a way to get sued when you investigate employee misconduct? Then prohibit employees from discussing the investigation with their co-workers. If you are scratching your head at that bizarre pronouncement, you are not alone. A federal agency that enforces employment laws recently decided that blanket confidentiality instructions to employees during internal investigations can violate the law and are not justified by the employer's generalized need to protect the integrity of the investigation. The ruling applies to both union and non-union employers. There are, however, ways to minimize the risk of liability under this new standard. Ignoring allegations of workplace harassment, discrimination, theft, or other misconduct increases potential liability on several fronts. On the other hand, a prompt investigation followed by appropriate remedial action can help insulate your nonprofit from liability. Most nonprofit employers routinely instruct employees who are interviewed during an internal investigation to keep the matter confidential. Maintaining confidentiality not only reduces the chance that someone will destroy evidence or improperly influence witnesses, it also promotes anti-discrimination policies. For example, an employee who has been subjected to sexual harassment may be too embarrassed to complain if she thinks the circumstances will become widely-known. That, of course, is a ticking time bomb in your workplace. Notwithstanding these realities, the National Labor Relations Board ("NLRB") recently decided that an employer violated federal law by instructing its employees not to discuss a pending internal investigation with co-workers. Banner Health System, 358 NLRB No. 93 (July 30, 2012). The NLRB reasoned that the blanket confidentiality instruction interfered with employees' legal rights under federal law because it had the effect of prohibiting them from discussing matters of mutual...