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MODIFIED CONFIDENTIALITY POLICY WILL COMPLY WITH NATIONAL LABOR RELATIONS ACT (Tuesday, August 20, 2013)

Banner Health System (“Banner”) operates a hospital providing inpatient and outpatient medical care in Phoenix, Arizona.

Every employee hired by Banner was required to sign a confidentiality agreement. The confidentially agreement stated: “I understand that I may hear, see and create information that is private and confidential.” Examples of confidential information are patient information both medical and financial, private employee information (such as salaries, disciplinary action, etc.) that is not shared by the employee, copyrighted computer programs, business and strategic plans contract terms, financial cost data and other internal documents.”

An employee’s failure to keep such information confidential could subject the employee to corrective action, including termination and possible legal action.

According to the National Labor Relations Board (“NLRB”), to justify a prohibition on employee discussion of on-going investigations, an employer must show that it has a legitimate business justification that outweighs employees’ rights under the National Labor Relations Act. Banner asserted its prohibition was justified by its concern with protecting the integrity of its investigations. The NLRB found that Banner’s generalized concern with protecting the integrity of its investigations was insufficient to outweigh employees’ rights. Rather, it was Banner’s burden to determine whether in any given investigation witnesses needed protection, evidence was in danger of being destroyed, testimony was in danger of being fabricated, or there was a need to prevent a cover up. Banner’s blanket confidentiality policy failed to meet those requirements. The NLRB found that by maintaining and applying a rule prohibiting employees from discussing ongoing investigations of employee misconduct, Banner violated the law.

Banner Health System d/b/a Banner Estrella Medical Center and James A. Navarro.

358 NLRB No. 93 (2012) 

More recently, a National Labor Relations Board regional office submitted a case for advice. The issue was whether the employer’s confidentiality rule unlawfully interfered with employees’ rights, by precluding disclosure of information about ongoing investigations into employee misconduct.  

The Office of the General Counsel agreed with the regional office that the employer’s rule was unlawfully overbroad. Here are the details.

Verso Paper maintained a Code of Conduct which set forth Verso’s expectations for employee conduct in various situations. The relevant language said this:

Verso has a compelling interest in protecting the integrity of its investigations. In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up. To assist Verso in achieving these objectives, we must maintain the investigation and our role in it in strict confidence. If we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination. 

This policy was found overbroad because an employer cannot maintain a blanket rule regarding the confidentiality of employee investigations, but must demonstrate its need for confidentiality on a case-by-case basis.

The first two sentences of the employer’s rule lawfully set forth the Employer’s interest in protecting the integrity of its investigations.  The Office of the General Counsel offered advice for fixing the policy. Verso could modify the remainder of the rule to tell employees that:

Verso may decide in some circumstances that in order to achieve these objectives, it must maintain the investigation and the Company’s role in it in strict confidence. If Verso reasonably imposes such a requirement and an employee does not maintain such confidentiality, he or she may be subject to disciplinary action up to and including immediate termination. 

NLRB Office of the General Counsel

Advice Memorandum, Case No. 30-CA-089350

(January 29, 2013)


· Michael R. Lied
· Howard & Howard Attorneys PLLC
· One Technology Plaza, 211 Fulton Street, Suite 600, Peoria, IL 61602
· (309) 999-6311
· MLied@howardandhoward.com

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