03 May 2021
Seyfarth Shaw LLP
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Once again, the National Labor Relations Board's soleDemocrat, Chairman McFerran, has issued a dissent that sheds lighton how a Biden-Board likely will reverse precedent established bythe Trump-Board. This update is our third in a multi-part seriesdiscussing how Chairman McFerran's dissents are likely tobecome the law once President Biden appoints new Board members andthe Democrats are in the majority (seehereregarding confidentiality inarbitration agreements andhereregarding implementation of employeehandbooks). The latest example of this appears in the Board'sApril 16, 2021 decision,Alcoa Corporation, whichconsidered the enforceability of an employer's investigativeconfidentiality rules.
Alcoa interviewed a handful of employees as part of aninvestigation into the alleged misconduct by one of theirco-workers. The company interviewer told each employee that theconversation was confidential, and that the conversation should notbe shared with others, including supervisors and other employees.The employees also were told to decline to answer questions ifasked. Alcoa's stated reason for the confidentiality directiveswas that "historically hourly employees did not write outstatements on other hourly employees" (even though there wasno evidence of this).
These directives subsequently were challenged as restraining andcoercing the witnesses in violation of Section 8(a)(1) of theNational Labor Relations Act. After a trial, the administrative lawjudge agreed, finding the directives particularly problematicbecause they were not limited by time or place because they did nottell the witnesses that they could speak about the investigationonce it was over.
The Board majority, consisting of two Republican Members,disagreed, relying on two recent Board decisions: Apogee RetailLLC(2019), andWatco TransloadingLLC(2020). InApogee, the Board held thatinvestigative confidentiality rules that, by their terms, applyonly for the duration of any investigationarecategoricallylawful. That holding did not,however, extend to rules that would apply to non-participants orthat would prohibit employees from discussing the event or eventsgiving rise to the investigation.Watcoheldthat theApogeeframework applied to anemployer's one-on-one confidentiality instruction to anemployee, but noted that in the context of an oral directive,"it is appropriate for the Board to assess the surroundingcircumstances to determine what employees would reasonably haveunderstood concerning the duration of requiredconfidentiality."
In finding lawful the confidentiality directive given toemployees, theAlcoaBoard disagreed with theALJ that the directives were unlawfully unlimited in time andplace. In reaching this conclusion, the Board noted that theemployer ultimately provided notes of the interviews to the unionand took no action against a union steward for discussing theinterview. Thus, according to the Board, these facts demonstratedthat "employees would reasonably understand that theconfidentiality restriction was limited to the duration of theinvestigation." The Board declined to consider whether theemployer's stated need for the confidentiality directiveoutweighed employees' Section 7 rights, noting that "[t]heneed to encourage participation in an ongoing workplaceinvestigation is self-evident."
In what she referred to as "an especially tortured effortto excuse an employer's obvious infringement of the Act,"Chairman McFerran wrote a lengthy dissent, arguing againsttheApogeeandWatcoholdings,and also finding that even under those decisions, Alcoa violatedSection 8(a)(1). In terms of the Board's finding that employeeswould have understood that the confidentiality directives werelimited to the duration of the investigation, McFerran pointed tothe lack of evidence that any employee knew that the employer hadshared witness summaries or that a union steward had escapeddiscipline for talking about the interviews.
As did her dissents in the two earlier cases, McFerran'sdissent inAlcoa sets the stage for what thestandard is likely to be under a Biden Board. Specifically, citingto previous Board law addressing the employees' Section 7 rightto discuss investigations with coworkers and their union, McFerranexplained that "[t]raditionally, the Board has protected thatright by allowing employees to impose confidentiality requirementsonly if they could prove that a legitimate and substantial businessjustification outweighed employees' rights in the circumstancesof a particular case." This framework prevents a bright linerule as each case will depend on its facts. Summarizing her dissentinApogee, McFerran wrote inAlcoa:
I endorsed the Board's existing approach, exemplified incases likeBanner Estrella, which required employersto proceed on a case-by-case basis in imposinginvestigative-confidentiality restrictions on employees. Thisapproach properly accommodated the competing interests of employersand employees. It focused the Board, the employer, and employees onthe relevant circumstances of each case and so tended to minimizethe chilling effect on employees, who would better understand notjust "why nondisclosure is being requested, but also whatmatters are not appropriate for conversation."
As the McFerran dissent is likely to become Board law once Bidenappoints new Members, employers should review their investigativepolicies and practices. Notably, McFerran pointed out that"[r]ank and file employees do not generally bring law books towork or apply legal analysis to company rules as do lawyers, andcannot be expected to have the expertise to examine company rulesfrom a legal standpoint."
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