A National Labor Relations Board ruling that forbids employers from issuing blanket rules ordering workers to keep investigations confidential could seriously hamper and even undermine such investigations, some experts say.

While the NLRB ruling permits employers to require worker confidentiality in an investigation if they can provide a valid business reason, it puts the onus on employers and adds an unnecessary step in such investigations, they say.

Observers describe the rule in Banner Health System, DBA Banner Estrella Medical Center and James A. Navarro as part of the NLRB's strategy to remain relevant in today's prevailing nonunion environment (see related story).

But experts differ in their advice about how employers should respond to the ruling (see related story).

“To justify a prohibition on employee discussion of ongoing investigations, an employer must show that it has a legitimate business justification that outweighs employees' Section 7 rights,” an NLRB panel ruled 2-1 in the July 30 Banner decision.

Section 7 of the National Labor Relations Act gives union and nonunion workers the right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

The case involved a human resources consultant who routinely asked employees at the Phoenix medical center who made a complaint not to discuss the matter with co-workers while the investigation was ongoing. Such a request “had a reasonable tendency to coerce employees, and so constituted an unlawful restraint” of workers' concerted activity rights, the panel ruled.

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“It's a huge problem,” Jonathan T. Hyman, a partner with Kohrman Jackson & Krantz P.L.L. in Cleveland, said of the ruling. “One of the hallmarks of any successful, thorough investigation is confidentiality,” which ensures witnesses neither prepare nor compare their stories.

“There are a multitude of reasons to maintain confidentiality of an investigation,” said Jay Sabin, general counsel at Woodbridge, N.J.-based transportation logistics firm Grocery Haulers Inc. “What we intend to do is articulate, or at least be able to articulate, the reason or reasons why we ask either a complainant, a person under investigation or a witness to keep the information confidential.”

Russell D. Cawyer, a partner at Kelly Hart & Hallman L.L.P. in Fort Worth, Texas, said the NLRB ruling “is contrary to the advice that most practitioners give to employers about how to conduct investigations.”

“When you can't prohibit witnesses from talking amongst each other, you could have issues regarding the preservation of evidence,” he said. “They can either destroy or delete that evidence, or alter that evidence. I think it's a terrible precedent.”

The ruling “puts employers in a very difficult position to run an investigation that will gather information that is assured to be ... new and fresh, without worrying about spoilage” or creating information that defeats the investigation's integrity, said Christine Liu McLaughlin, a shareholder at Godfrey & Kahn S.C. in Milwaukee. The burden created by Banner is “going to be pretty hard to meet right out of the gate of an investigation.”

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If an employee is reluctant to report a problem because an investigation will not be kept confidential, it “makes it more difficult to identify and eliminate wrongdoing,” which “could result in increased litigation,” said Michael S. Arnold, an associate with Mintz Levin Cohn Ferris Glovsky & Popeo P.C. in New York.

“There's a real conflict between what the NLRB is doing and what the courts and other agencies would say an employer should do under Title VII (of the Civil Rights Act of 1964), or under a host of other employment laws,” said Jonathan C. Fritts, a partner at Morgan, Lewis & Bockius L.L.P. in Washington.

John M. Skonberg, a shareholder with law firm Littler Mendelson P.C. in San Francisco, said, “The NLRB does say that if you can demonstrate a good reason for confidentiality, then that's acceptable, but ... you don't know if they're going to go out and talk to other people, so it's a difficult standard to meet” and it is “a little bit unrealistic to place the burden on the employer to demonstrate that confidentiality is necessary.”

The ruling “fails to recognize the problems it causes in the workplace” to conduct a fair, prompt and impartial investigation, which is in employers' and employees' best interests, said Michael J. Underwood, a partner at Porter Wright Morris & Arthur L.L.P. in Columbus, Ohio.

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Renee Inomata, a partner at Burns & Levinson L.L.P. in Boston, said the ruling may be a particular surprise for employers with nonunion workforces because they tend to believe they can control most aspects of an employee's relationships. Banner “really puts constraints on those areas where it's a little bit gray as to what the legitimate business interest is,” she said.

However, Susan Davis, a partner at Cohen, Weiss & Simon L.L.P. in New York, a law firm that represents the interests of labor and individuals, defended the ruling.

Under the Obama administration, the NLRB has been “going back to what it thinks is the purpose of the statute, which is to protect the exercise of Section 7 rights, and those include the right to talk to one another about various issues that arise in the workplace,” she said. “So I think it's an appropriate decision.”

An NLRB spokeswoman had no comment.