Banner Health System v. National Labor Relations Board
2017 U.S. App. LEXIS 5191
| D.C. Cir. | 2017Background
- Banner Health required new hires to sign a Confidentiality Agreement defining "confidential information" to include "private employee information (such as salaries, disciplinary action, etc.) not shared by the employee."
- James Navarro, a sterilization tech at Banner Estrella, raised safety concerns about sterilization procedures, later received a nondisciplinary coaching and a negative evaluation, and filed an unfair labor practice charge with the NLRB alleging retaliation.
- The NLRB regional complaint was amended to allege (1) Banner’s Confidentiality Agreement was overbroad and unlawful under Section 8(a)(1), and (2) Banner maintained a categorical policy instructing employees not to discuss investigative interviews.
- Evidence for the confidentiality-agreement claim: the Agreement itself and testimony that all new hires were required to sign it. The Agreement explicitly referenced salaries and disciplinary action.
- Evidence for the investigative-nondisclosure claim: an "Interview of Complainant" form containing a scripted introduction requesting nondisclosure for "all interviews," and equivocal HR testimony (Odell) that she sometimes requested confidentiality in "more sensitive situations" and in multi-witness investigations.
- Administrative rulings: ALJ invalidated the Agreement but rejected the categorical-investigations claim; the NLRB reversed on the investigations policy (finding it categorical) and affirmed invalidation of the Agreement; the court enforces the Board’s finding as to the Agreement but rejects enforcement as to a categorical investigations policy due to insufficient evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Banner's Confidentiality Agreement unlawfully chilled Section 7 activity by barring discussion of salaries and discipline | Agreement prohibits discussion of quintessential Section 7 topics (salaries, discipline); overbroad and unlawful | Agreement limited to employer-protected secrets and not reasonably read to restrict Section 7 activity | Court enforced NLRB: Agreement is overbroad and unlawful; employee-protected discussions reasonably could be proscribed by its text |
| Whether Banner maintained a categorical policy requiring nondisclosure for certain types of investigations | The scripted interview form and HR practice show a standardized nondisclosure rule applied to categories (e.g., sexual harassment) | Form is a template; HR testimony shows case-by-case, limited use; no evidence employees knew or that it was categorically applied | Court denied enforcement of NLRB on this point: record lacks substantial evidence of a categorical policy |
| Whether Board properly balanced employer justification against Section 7 interests for the Agreement | NLRB: Banner failed to show a legitimate, substantial, tailored business justification outweighing employee rights | Banner argued patient privacy, EEO and confidentiality needs justify the Agreement | Court agreed with NLRB: Banner did not tailor Agreement to legitimate interests; burden on Section 7 was not justified |
| Whether remedial scope (posting at all facilities using the Agreement) was appropriate | NLRB: Broad posting where Agreement used is warranted | Banner argued lack of proof Agreement used beyond one hospital | Court upheld remedial posting requirement as within Board discretion given Agreement branding and references to "Banner" |
Key Cases Cited
- Quicken Loans, Inc. v. NLRB, 830 F.3d 542 (D.C. Cir. 2016) (Section 7 protects employee discussion of terms and conditions of employment)
- Cmty. Hosps. of Cent. California v. NLRB, 335 F.3d 1079 (D.C. Cir. 2003) (confidentiality rules limited to patient information upheld where not reasonably read to cover terms/conditions)
- Brockton Hosp. v. NLRB, 294 F.3d 100 (D.C. Cir. 2002) (invalidating broader confidentiality rule that could encompass employment terms)
- Hyundai Am. Shipping Agency, Inc. v. NLRB, 805 F.3d 309 (D.C. Cir. 2015) (framework for assessing whether a rule could be reasonably construed to restrict Section 7 activity and employer justification test)
- Cintas Corp. v. NLRB, 482 F.3d 463 (D.C. Cir. 2007) (ambiguities in employer rules construed against employer; overbroad rules can chill Section 7 activity)
- Labinal, Inc. v. NLRB, 340 NLRB 203 (NLRB) (Board decision) (innocently obtained wage information is Section 7-protected and restrictions on its use are problematic)
- E.I. Du Pont De Nemours & Co. v. NLRB, 682 F.3d 65 (D.C. Cir. 2012) (standard of review for NLRB factual findings)