By: Jennifer L. Mora and Jeffrey A. Berman

Once again, the National Labor Relations Board’s sole Democrat, Chairman McFerran, has issued a dissent that sheds light on how a Biden-Board likely will reverse precedent established by the Trump-Board. This update is our third in a multi-part series discussing how Chairman McFerran’s dissents are likely to become the law once President Biden appoints new Board members and the Democrats are in the majority (see here regarding confidentiality in arbitration agreements and here regarding implementation of employee handbooks). The latest example of this appears in the Board’s April 16, 2021 decision, Alcoa Corporation, which considered the enforceability of an employer’s investigative confidentiality rules.

Alcoa interviewed a handful of employees as part of an investigation into the alleged misconduct by one of their co-workers. The company interviewer told each employee that the conversation was confidential, and that the conversation should not be shared with others, including supervisors and other employees. The employees also were told to decline to answer questions if asked. Alcoa’s stated reason for the confidentiality directives was that “historically hourly employees did not write out statements on other hourly employees” (even though there was no evidence of this).

These directives subsequently were challenged as restraining and coercing the witnesses in violation of Section 8(a)(1) of the National Labor Relations Act. After a trial, the administrative law judge agreed, finding the directives particularly problematic because they were not limited by time or place because they did not tell the witnesses that they could speak about the investigation once it was over.

The Board majority, consisting of two Republican Members, disagreed, relying on two recent Board decisions:  Apogee Retail LLC (2019), and Watco Transloading LLC (2020). In Apogee, the Board held that investigative confidentiality rules that, by their terms, apply only for the duration of any investigation are categorically lawful. That holding did not, however, extend to rules that would apply to non-participants or that would prohibit employees from discussing the event or events giving rise to the investigation. Watco held that the Apogee framework applied to an employer’s one-on-one confidentiality instruction to an employee, but noted that in the context of an oral directive, “it is appropriate for the Board to assess the surrounding circumstances to determine what employees would reasonably have understood concerning the duration of required confidentiality.”

In finding lawful the confidentiality directive given to employees, the Alcoa Board disagreed with the ALJ that the directives were unlawfully unlimited in time and place. In reaching this conclusion, the Board noted that the employer ultimately provided notes of the interviews to the union and took no action against a union steward for discussing the interview. Thus, according to the Board, these facts demonstrated that “employees would reasonably understand that the confidentiality restriction was limited to the duration of the investigation.” The Board declined to consider whether the employer’s stated need for the confidentiality directive outweighed employees’ Section 7 rights, noting that “[t]he need to encourage participation in an ongoing workplace investigation is self-evident.”

In what she referred to as “an especially tortured effort to excuse an employer’s obvious infringement of the Act,” Chairman McFerran wrote a lengthy dissent, arguing against the Apogee and Watco holdings, and also finding that even under those decisions, Alcoa violated Section 8(a)(1). In terms of the Board’s finding that employees would have understood that the confidentiality directives were limited to the duration of the investigation, McFerran pointed to the lack of evidence that any employee knew that the employer had shared witness summaries or that a union steward had escaped discipline for talking about the interviews.

As did her dissents in the two earlier cases, McFerran’s dissent in Alcoa sets the stage for what the standard is likely to be under a Biden Board. Specifically, citing to previous Board law addressing the employees’ Section 7 right to discuss investigations with coworkers and their union, McFerran explained that “[t]raditionally, the Board has protected that right by allowing employees to impose confidentiality requirements only if they could prove that a legitimate and substantial business justification outweighed employees’ rights in the circumstances of a particular case.” This framework prevents a bright line rule as each case will depend on its facts. Summarizing her dissent in Apogee, McFerran wrote in Alcoa:

I endorsed the Board’s existing approach, exemplified in cases like Banner Estrella, which required employers to proceed on a case-by-case basis in imposing investigative-confidentiality restrictions on employees. This approach properly accommodated the competing interests of employers and employees. It focused the Board, the employer, and employees on the relevant circumstances of each case and so tended to minimize the chilling effect on employees, who would better understand not just “why nondisclosure is being requested, but also what matters are not appropriate for conversation.”

As the McFerran dissent is likely to become Board law once Biden appoints new Members, employers should review their investigative policies and practices. Notably, McFerran pointed out that “[r]ank and file employees do not generally bring law books to work or apply legal analysis to company rules as do lawyers, and cannot be expected to have the expertise to examine company rules from a legal standpoint.”