Employers have an obvious interest in keeping employee investigations confidential. It is common for employers to instruct employees participating in the investigation that they must keep matters related to the investigation confidential. However, the NLRB's General Counsel's Office recently released an advice memorandum in the case of Verso Paper stating that an employer's policy categorically prohibiting employees from disclosing information about employee investigations is unlawfully overbroad and interferes with employees' Section 7 Rights. In that same memorandum, the General Counsel provided an example of lawful confidentiality language that employers may use for policies and forms related to confidentiality in employee investigations.

Facts of Verso Paper Case:

The employer, Verso Paper, maintained a confidentiality provision in its code of conduct stating that:

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.

The General Counsel's Office concluded that these blanket confidentiality requirements are unlawful under the NLRB's decision in a previous case, Banner Health System dba Banner Estrella Medical Center and James Navarro, Case 28-CA-023438, July 30, 2012. The General Counsel’s Office also stated that:

• The first two sentences setting out potential interests in confidentiality were lawful.
• The unlawful provision could be remedied if the employer had employees acknowledge:
  • [Employer] may decide in some circumstances that in order to achieve these objectives, we must maintain the investigation and our role in it in strict confidence. If [Employer] reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination

Take Aways for Employers:

• Although this advice memorandum is not binding precedent from the panel (Board) heading the judicial functions of the NLRB, employers might consider shoring up policies regarding confidentiality and forms they use during investigations to include:
• Statements like those in the first two sentences of Verso's provision.
• An employee acknowledgment similar to the one suggested by the General Counsel's Office.

Please contact the head of GDHM’s Employment Law group, Susan Burton, at sburton@gdhm.com or 512.480.5738 for more information about employee investigations, or any other employment law related questions.

Notice: We are providing this client alert as a commentary on current legal issues, and it should not be considered legal advice, which depends on the facts of each situation. Receipt of this client alert does not establish an attorney-client relationship. The listed attorneys and / or other attorneys may provide services in connection with a particular matter.

Ramon concentrates his practice in general civil litigation, at the trial and appellate level, and employment law. His experience covers a wide range of subject areas including: complex business disputes, real estate and construction litigation, employment discrimination and retaliation lawsuits.

Ramon earned his undergraduate degree from Stanford University and his law degree from The University of Texas School of Law. During his time at UT Law, Ramon served as the president of Outlaw, a social and political student organization dedicated to serving the LGBT community at the law school.

Prior to joining Graves Dougherty in 2007, Ramon was the legislative director for State Representative Roberto R. Alonzo. He currently is involved in several organizations including Equality Texas, the Hispanic Bar Association of Austin, Texas Young Lawyers Association and the Austin Bar Association.

“This firm has a long history of giving back to the community,” Rick Triplett, Shareholder at GDHM who practices in the fields of entertainment and commercial real estate and an Austin Film Society board member since 2000, said. “We are particularly excited about this opportunity because of the importance of the film industry to Austin’s culture and economy.”

The 13th annual Texas Film Hall of Fame Awards will be held Thursday, March 7 at 6 p.m. at Austin Studios and will honor a legendary group of Texas artists in film and television. This year’s honorees are a talented group that includes Academy, Golden Globe, Gotham, Spirit and Emmy Award-nominated actors. One hundred percent of the evening’s proceeds benefit the Austin Film Society’s filmmaking grants and educational programs, which discover and fund emerging talent throughout the state of Texas, often launching significant careers in the arts. 

One proactive and preventative strategy to avoid such lawsuits is to have a company policy prohibiting employees from working more than forty hours a week without prior approval.

Such a policy is a good step towards managing the risk of lawsuits for unpaid overtime. However, employees who sue for overtime often claim that the employer circumvented or did not follow its own policy because supervisors:

0. withheld overtime approval;
0. required employees to either clock out but continue working or not clock in during working time i.e. during “on-call” time;
0. falsified their employees’ time records to avoid reporting of overtime.

If an employee makes these types of claims, the employer must then be able to present credible evidence (i.e. documentation) that the employee is wrong.  If a group of employees presents a consistent story,  i.e. that supervisors would not let them report overtime, then it will be difficult for the employer to win on this fact question.  Even if the employer has good policies, if the supervisors are not enforcing them, the employer may be liable for unpaid overtime and the other damages and attorneys’ fees that are available in unpaid overtime cases.

Employers with “overtime approval required” policies should  remember these tips:

0. Train your supervisors on the company policies regarding overtime and remind them that employees must be paid for all overtime worked, even if it was not authorized. If it was worked, it needs to be paid.
0. It deserves repeating -- non-exempt employees who violate the policy and work more than 40 hours without approval must still be paid for all hours worked.
0. Employees who violate the policy can and should be consistently and equally disciplined.
0. The discipline for failing to obtain prior approval should usually be progressive discipline (everything from “don’t do it again” for the first offense to “you’re fired!” after appropriate warnings and reprimands have been given to no avail).

Please contact the head of GDHM’s Employment Law group, Susan Burton, at sburton@gdhm.com or 512.480.5738 for more information about overtime laws, or any other employment law related questions.

Notice: We are providing this client alert as a commentary on current legal issues, and it should not be considered legal advice, which depends on the facts of each situation. Receipt of this client alert does not establish an attorney-client relationship. The listed attorneys and / or other attorneys may provide services in connection with a particular matter.

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