• NLRB Rules That Nonunion Employees Have a Right to Representation in Investigative Interviews (Weingarten rights)
• THE FAIR CREDIT REPORTING ACT AND WORKPLACE INVESTIGATIONS
• MEDIATION CAN BE BINDING
• EL&P Successful Before 4th Circuit

NLRB Rules That Nonunion Employees Have a Right to Representation in Investigative Interviews (Weingarten rights)

In a July 10 decision, the National Labor Relations Board (the Board) ruled that nonunion employees are entitled to have a coworker join and perhaps represent them in any investigative interviews that they believe could result in disciplinary action (called "Weingarten rights"). The decision makes it an unfair labor practice for a nonunion employer to discipline or discharge an employee for insisting upon such representation. However, nonunion employers are not obligated to conduct an investigative interview before proceeding with disciplinary action, and the Board's decision does not require employers to advise nonunion employees of Weingarten rights.

Under Section 7 of the National Labor Relations Act (the Act), employees have the right to "engage in . . . concerted activities for the purpose of mutual aid or protection." Under Section 8(a)(1) of the Act, it is an unfair labor practice to "interfere with, restrain, or coerce employees in the exercise" of these rights. In unionized workplaces, the U.S. Supreme Court has ruled that Section 7 grants employees the right to representation in investigative interviews that they reasonably believe could result in disciplinary action. According to the Court, the union representative safeguards the interests of the individual employee as well as "the interests of the entire bargaining unit by exercising vigilance to make certain that the employer does not initiate or continue a practice of imposing punishment unjustly." NLRB v. Weingarten, Inc., 420 U.S. 251 (1975).

The Weingarten decision concerned a unionized workplace, and the Board has long read it to apply only to employees in unionized workplaces because: (1) redressing the economic balance between labor and management is of lesser significance when employees are not represented by a union, (2) an employee representative would have no obligation to represent the interests of the entire unit, (3) it is less likely that a coworker would have the skills equivalent to those of a union representative and (4) the right to representation in a nonunion setting might be detrimental to the employee if the employer decided to forgo the interview rather than conduct it with an employee representative present.

In July, the Board abruptly reversed itself in Epilepsy Foundation of Northeast Ohio, 331 NLRB 92 (7/10/00). In a 3-2 decision, Chairman John Truesdale, and Members Sarah Fox and Wilma Liebman overruled Board precedent and reinterpreted the Act to grant employees in nonunion workplaces the right to have a coworker present during an investigative interview if they reasonably believe that it may result in disciplinary action. According to the Board, this is consistent with the Supreme Court decision in Weingarten. The Act "generally affords employees the opportunity to act together to address the issue of an employer's practice of imposing unjust punishment on employees" and these rights are "in no wise dependent on union representation for their implementation." The Board's earlier decisions on this issue "misconstrue the language of Weingarten and erroneously limit its applicability to the unionized workplace."

The Board rejected its previous rationale for limiting representational rights to unionized workplaces. The Board no longer believes that Weingarten rights interfere with an employer's right to deal directly with employees in a nonunion setting. According to the Board, an employer is free to forego the investigative interview and pursue other means of resolving the matter. There is also no reason to believe that a coworker would not be motivated to act in the interest of fellow workers, that employees lack the ability to offer constructive assistance, or that the availability of Weingarten rights will encourage employers to forego interviewing an accused employee, to that employee's detriment.

In Epilepsy Foundation, the Board concluded that the employer violated Section 8(a)(1) by firing an employee for attempting to exercise Weingarten rights. The employer was ordered to reinstate the employee with back pay and benefits, notwithstanding that the employer relied upon old Board law in deciding his fate.

Members Peter Hurtgen and J. Robert Brame, III dissented. They pointed out that the decision "endows nonunionized employees with a right of representation in one specific situation, although they have not elected a union to represent them in any of their other dealings with management." The dissent also noted that "employers who are legitimately pursuing investigations of employee conduct will face an unknown trip-wire" and be "completely unaware of this right to representation that the Board is imposing on them."

The decision does not impose any obligation upon nonunion employers to advise employees of Weingarten rights. The decision permits a "coworker" to be present in these situations, but otherwise it offers no guidance about who is eligible to be a representative. Disciplining or discharging an employee for refusing to proceed with the interview will constitute an unfair labor practice. However, employers remain free to forego an interview of the accused rather than grant the request, and to proceed with the investigation and determine by other means whether the accused should be disciplined.

Old Board law establishes that, when faced with a request for representation, an employer may:

1. Grant the request;
2. Dispense with, or discontinue, the interview; or
3. Offer the employee the choice of continuing the interview unaccompanied by a representative or of having no interview at all and thereby dispensing with any benefit that the interview might have conferred upon the employee. See Meharry Medical College, 236 NLRB 1396 (1978).

Federal employment law requires employers to investigate charges of misconduct such as race discrimination or sexual harassment in order to avoid liability. Confidentiality is usually important in conducting thorough and expeditious inquiries required by law. The Board's decision in Epilepsy Foundation could impede such investigations to the extent that nonunion employees request the presence of a representative, particularly if the representative is involved in the alleged misconduct.

Epilepsy Foundation does not affect the right of employers to deal directly with their nonunion employees about other terms and conditions of employment. For example, nonunion employers remain free to deal with individual employees about such matters as pay scales, promotions, safety issues, and hours of work without a coworker present. Refusing a request to have a coworker present in a meeting or discussion about such matters is not an unfair labor practice.

Mark M. Lawson

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THE FAIR CREDIT REPORTING ACT AND WORKPLACE INVESTIGATIONS

The Fair Credit Reporting Act (FCRA or the Act) was amended in 1996, when Congress passed the Consumer Reporting Reform Act. Amendments to the FCRA in 1996 added additional procedural requirements for the acquisition and use of consumer reports in the employment context.

The Federal Trade Commission (FTC or Commission) is the agency responsible for interpreting and enforcing FCRA, and it issues staff opinion letters in response to inquiries from employers and their representatives. On March 5, 1999, a member of the Commission's staff issued an opinion letter that has resulted in substantial concern among employers.

In the "Vail Opinion Letter," the FTC took the position that the 1996 amendments to the FCRA apply to sexual harassment investigations conducted by third-party investigators. The Commission's staff examined section 1681a(d), (e), and (f) of the FCRA and determined that third party investigators hired to perform sexual harassment investigations in the workplace are "consumer reporting agencies" under the Act. Thus, employers who retain third party investigators must implement various disclosure, consent, and communication procedures with respect to the investigated employee (e.g., the accused harasser) before and after the investigation commences.

The notice and disclosure requirements under the FCRA that an employer must follow if they use third party investigators are quite onerous. Thus, many have raised concerns that these requirements will impede an employer's ability to effectively investigate allegations of workplace harassment and thereby rid the workplace of such harassment.

On November 16, 1999, Congressman Sessions of Texas introduced HR 3408, the "Fair Credit Reporting Amendments Act of 1999." The thrust of this amendment is to amend the Act so that "consumer report" does not include:

(iv) [a] report… prepared by an employee or agent of a consumer's employer solely for the purpose of investigating allegations of drug use or sales, violence, sexual harassment, employment discrimination, job safety or health violations, criminal activity, including theft, embezzlement, sabotage, arson, patient or elder abuse, child abuse, or other violations of law; or

(v) [a] report prepared in connection with litigation, anticipation of litigation, due diligence, investigation of insurance claims, civil and criminal fraud, failure to pay child support, or any other violations of law.

On December 2, 1999, Congressman Sessions' bill was referred to the Senate Committee on Financial Institution and Consumer Credit. A committee hearing was held May 2, 1999.

In its prepared statement to Congress, the FTC admitted that as a consequence of the 1996 amendments, "and because the operative FCRA definitions are broad," an outside entity such as a private investigator or law firm that regularly conducts investigations of alleged workplace misconduct will generally qualify as a "consumer reporting agency," and subsequent reports will likely be "consumer reports" within the meaning of the FCRA.

In its statement, the Commission maintained that it "fully appreciates that practical problems may arise in applying all the FCRA requirements to investigations by third parties of workplace misconduct." It noted a "considerable tension" between some of the affirmative requirements that the 1996 amendments to the FCRA impose on employers and certain public policy aims of statutes or regulations that compel or encourage investigations in various forms of workplace misconduct. In summary, the Commission favored adding a new FCRA provision applicable to investigations of alleged or suspected workplace illegalities, which would provide that, in cases in which a consumer report is obtained for the purpose of investigating suspected or alleged misconduct by an employee, compliance with certain sections of the FRCA is not required.

The Chairwoman of the EEOC, Ida L. Castro, also presented a prepared statement to Congress that set forth the dilemma faced by every employer. She noted that new questions about regulation of third-party employment discrimination investigations "[has] a significant bearing on the effective enforcement of the civil rights laws." She referred to Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Industries v. Ellerth, 524 U.S. 742 (1998). As a result of these cases, employers are required to establish effective policies and complaint procedures to prevent, investigative, and promptly correct workplace harassment. Making reference to Kolstad v. American Dental Association, 119 S. Ct. 2118 (1999), Ms. Castro referred to the Supreme Court's ruling that an employer has a defense against an award of punitive damages based on the discriminatory actions by its managers, when the employer has taken good-faith efforts to comply with the federal EEOC statutes. Good-faith efforts include prompt and fair investigations of complaints of harassment and other forms of workplace discrimination.

One option employers have is to implement policies requiring employees to sign a "blanket" prospective consent to workplace investigations and related consumer reports that the employer may request during the course of their employment.

Current employees may be required to sign such consent forms, with the caveat that state law may potentially restrict the employer's right to discipline or terminate the employee who refuses. The Employer should also consider including in its policies a statement that because investigation of potential violations of company policy or misconduct is so vital to compliance with applicable laws, as well as to the maintenance of the productive, safe work environment, refusal to sign the appropriate consent forms will lead to discipline, up to and including termination. It should be noted that nothing in the FCRA precludes discipline, up to and including termination, for refusal to consent to the investigator's report. However, in a state that recognizes a tort claim for termination or discipline in violation of public policy, it is possible that an employee could successfully argue that a right to refuse consent is implied by the FCRA, and that an employer may not impose an adverse employment decision on this basis.

Notwithstanding the potential civil remedies for a violation of the Act, it is far more serious for an employer to fail to take prompt remedial action in the face of sexual harassment allegations. It seems clear that the Act needs amendment, and thereafter the current controversy may be resolved. In the interim, however, it seems prudent for an employer to continue to use outside investigators where expertise is required, but it is important that employers are cognizant of the potential pitfalls that may arise under the FCRA if they do use outside investigators.

Mark M. Lawson

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Mediation is non-binding. That statement is true, but only up to and until a settlement agreement is reached. In a recent case from the Tennessee Court of Appeals, the Court held that, absent fraud or mistake, once the agreement was reached, the agreement became conclusive. The plaintiff in that case had complained that undue stress and duress had caused him to accept the agreement initially. The Court rejected the claim on certain contract principles.

The lesson simply is this: up and until the basics of the settlement agreement are fixed, mediation is non-binding. At some point in the process, an agreement can be reached on which reliance is based or consideration is given, causing the agreement to become fixed. At that point, unless fraud or mistake is proven (usually by clear and convincing evidence), the agreement will probably be enforced.

James Wm. Elliott, Jr.

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On June 2, 2000, a panel of the U.S. Court of Appeals for the Fourth Circuit decided in favor of a former Virginia deputy sheriff who was sued for obtaining arrest warrants without probable cause. The appeals court reversed the district court's order denying the deputy's qualified immunity defense. Steve Minor of Elliott Lawson & Minor argued on behalf of the deputy in the Court of Appeals. Watkins v. Arnold, 2000 WL 709563 (4th Cir. 2000).

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