Apogee Retail LLC d/b/a Unique Thrift Store, (2019)

• Date: 16 December 2019

368 NLRB No. 144

NOTICE: This opinion is subject to formal revision before publication in the

bound volumes of NLRB decisions. Readers are requested to notify the Ex-

ecutive Secretary, National Labor Relations Board, Washington, D.C.

20570, of any typographical or other formal errors so that corrections can

be included in the bound volumes.

Apogee Retail LLC d/b/a Unique Thrift Store and

Kathy Johnson. Cases 27–CA–191574 and 27–

CA–198058

December 16, 2019

DECISION AND ORDER REMANDING

BY CHAIRMAN RING AND MEMBERS MCFERRAN,

KAPLAN,AND EMANUEL

The issue in this case is wh ether the Respondent law-

fully maintained two written rules, one requiring employ-

ees to “maintain confidentiality” regarding workplace in-

vestigations into “illegal or unethical behavior” and the

other prohibiting “unauthorized discussion” of investiga-

tions or interviews “with other team members.” We over-

rule the Board’s approach to investigative confidentiality

rules set forth in Banner Estrella Medical Center, 362

NLRB 1108 (2015), enf. denied on other grounds 851 F.3d

35 (D.C. Cir. 2017), which demands a case-by-case deter-

mination of whether confidentiality can be required in a

specific investigation. Applying the test for facially neu-

tral workplace rules established in Boeing Co., 365 NLRB

No. 154 (2017), we hold instead that investigative confi-

dentiality rules are lawful and fall within Boeing Category

1—types of rules that are lawful to maintain—wher e by

their terms the rules apply for the duration of any investi-

gation. However, the rules at issue in this case are not

limited on their face to the duration of any investigation.

As such, they fall within Boeing Category 2. We therefore

find that a determination of their legality necessitates a re-

mand of this case to the Region for further proceedings as

to whether the Respondent has one or more legitimate jus-

tifications for requiring confidentiality even after an in-

vestigation is over, and if so, whether those justifications

outweigh the effect of requiring post-investigation confi-

dentiality on employees’ exercise of their rights under

Section 7 of the National Labor Relations Act.1

I. JURISDICTION

The Respondent, a State of Washington corporation

with a headquarters in Bellevue, Washington, is en gaged

in the operation of retail stores selling second-hand

1Upon charges filed by Kathy Johnson on January 20 and May 3,

2017, the General Counsel issued a complaint and notice of hearing al-

leging that the Respondent violated Sec.8(a)(1) by maintaining two

handbook provisions. The Respondent filed an answer denying the com-

mission of any unfair labor practices and asserting affirmative defenses.

Following the issuance of Boeing, supra, the hearing was rescheduled

and ultimately postponed indefinitely. On August 30, 2018, the General

Counsel issued an amended consolidated complaint and notice of

clothing and other items in locations throughout the

United States, including Aurora, Colorado (a location that

has since closed). During the 12-month period ending on

October 18, 2018, the Respondent, in conducting its busi-

ness, derived gross revenue in excess of $500,000 and pur-

chased and received at its Aurora, Colorado facility goods

and services valued in excess of $5000 from points located

directly outside the State of Colorado. The Respondent

has been an employer engaged in commerce within the

meaning of Section 2(2), (6),and (7) of the Act.

II. STIPULATED FACTS

At all material times, the Respondent has maintained the

following employee rules, contained in two separate pub-

lications and disseminated to all employees nationwide.

The first provision is contained in the Respondent’s Code

of Business Conduct and Ethics and provides in relevant

part:

Report Illegal or Unethical Behavior

Team members are expected to cooperate fully in inves-

tigations and answer any questions truthfully and to the

best of their ability. Reporting persons and those who

are interviewed are expected to maintain confidentiality

regarding these investigations. [Emphasis added.]

The second provision is contained in Respondent’s Loss Pre-

vention Policy and states in relevant part:

The following list, neither all-inclusive nor exhaustive,

are examples of behaviors that can have an adverse ef-

fect on the company and may lead to disciplinary action,

up to and including termination: . . . . Refusing to cour-

teously cooperate in any company investigation. This in-

cludes, but is not limited to, unauthorized discussion of

investigation or interview with other team members. . . .

[Emphasis added.]

The Respondent has not disciplined any employee for violat-

ing these rules.

The Respondent asserts the following business reasons

for maintaining the above provisions:

The retail industry experiences billions of dollars in

theft each year. A significant portion of that theft

involves various types of employee theft requiring

diligent and effective investigations.

hearing. On September 13, 2018, the Respondent filed an answer deny-

ing the commission of any unfair labor practices and asserting affirma-

tive defenses. On October 18, 2018, the Respondent and the General

Counsel filed a joint motion to waive a hearing and decision by an ad-

ministrative law judge and to transfer the proceeding to the Board for a

decision based on the stipulated record. On December 13, 2018, the

Board granted the parties’ joint motion. Thereafter, the General Counsel

and the Respondent filed briefs.

2DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

Employees have expressed reluctance to cooperate

in investigations out of fear of being labeled a

“whistleblower,” “rat” or “snitch.” This hinders the

ability of the employer to act quickly and deci-

sively.

[In c]ases involving multiple suspects, [the rules]

prevent[] the potential leak of critical investigative

information to other potential suspects.

Proving false allegations or claims made in bad

faith is difficult to do when the employer cannot get

to the factual truth wh en people discuss what they

know, believe or perceive what other witnesses say

during investigations.

The rule against required confidentiality of work-

place investigations can place employees and the

company at unnecessary risk, including physical

risk.

Allowing a company better controls to create and

sustain stronger safe harbors for employees when

reporting serious issues that require an investiga-

tion[] is necessary; prohibiting the employer from

requiring confidentiality hampers effective and

thorough investigations.

Often, investigation yields facts later on in the pro-

cess that would have indicated that confidentiality

should have been required at the outset of the inves-

tigation.

Employees interviewed during investigations al-

most always ask for confidentiality.

The Respondent further asserts that it has conducted

multiple investigations in which the inability to require

confidentiality has hindered the investigation. These in-

vestigations include cases in which (1) the Respondent

was unable to substantiate allegations because the infor-

mation gathered was not credible after “the parties were

2In the joint stipulation, the General Counsel took “no position on

the veracity” of the Respondent’s asserted business justifications and ex-

amples of the lack of confidentiality impeding the Respondent’s investi-

gations, asserting that they are “notrelevantto the determination of

whether Respondent’s maintenance of the rules” violates the Act. In its

brief to the Board, the General Counsel asserts that the Employer’s busi-

ness justifications for maintaining workplace investigation confidential-

ity rules “reflect interests that are common to all employers.”

3 By “similar to those at issue here,” we mean rules that require par-

ticipants in an investigation to maintain the confidentiality of the inves-

tigation and/or prohibit participants from discussing the investigation or

interviews conducted in the course of the investigation. That is what an

either coached or they discussed ahead of time what they

would say,” or employees took advantage of the lack of

confidentiality to manipulate the outcome; (2) accusers

openly discussed and attempted to influence others to

make similar statements; (3) employees were put in un-

comfortable situations or feared repercussions due to lack

of confidentiality when a manager was under investiga-

tion; (4) a manager accused of favoritism engaged in

threatening or intimidating behavior, and the employee re-

ceiving preferential treatment made disparaging com-

ments to customers based on knowledge of the accusation

and accusers; (5) details of a conversation with employee

relations were shared with multiple employees and dam-

aged an employee’s reputation to the point that he/she was

unable to return to work; (6) lack of confidentiality al-

lowed an individual to threaten retaliatory behavior, in-

cluding the threat of physical assault if the coworker did

not support the accused in an investigation; and (7) an em-

ployee resigned rather than face retaliation as a result of

reporting a situation when not assured of confidentiality.2

III.DISCUSSION

In considering whether the Respondent’s rules are law-

ful, we must first determine the appropriate analytical

framework. In recent years, the Board has followed the

case-by-case approach to investigative confidentiality

rules set forth in Banner Estrella Medical Center, supra.

As explained below, we find the Banner Estrella standard

deficient in several important respects, and we overrule it.

We find that investigative confidentiality rules are

properly analyzed under the Board’s test for facially neu-

tral workplace rules established in Boeing Co., supra. Un-

der that standard, we conclude that investigative confiden-

tiality rules similar to those at issue here but that by their

terms apply only to open investigations are categorically

lawful under Boeing, but investigative confidentiality

rules similar to those at issue here and not limited on their

face to open investigations belong in Boeing Category 2,

requiring individualized scrutiny in each case as to

whether any post-investigation adverse impact on NLRA-

protected conduct is outweighed by legitimate justifica-

tions.3

investigative confidentiality rule just is, by its very nature. Thus, our

holding does not extend to rules that would apply to nonparticipants, or

that would prohibit employees—participants and nonparticipants alike—

from discussing the event or events giving rise to an investigation (pro-

vided that participants do not disclose information they either learned or

provided in the course of the investigation). And our holding certainly

does not extend to rules that would prohibit employees from making re-

ports to, or filing charges or complaints with, government agencies. Ac-

cordingly, the dissent is incorrect when she claims that under our deci-

sion today, “any rule requiring investigative confidentiality during the

course of an investigation is permissible, no matter how it is written.”

We also reject her apparent view that an investigative confidentiality rule