Termination for Dishonesty During Internal Investigation Lawful, Says NLRB

In a positive development for employers, the NLRB held last week that the termination of an employee for lying during an internal investigation into complaints of harassing/discriminatory conduct was lawful.  Significantly, the decision occurred in a case that had been vacated as a result of Noel Canning.

First, a quick review of the facts.  The employee at issue was a union supporter.  During the campaign, the employee scribbled messages on union literature that were “vulgar, insensitive, and, in isolation, arguably threatening….”  The employer, in a “good faith response” to a complaint from several female employees, conducted an investigation to determine whether the employee violated its sexual harassment policy.  During the ensuing investigation, the employee lied twice.  More details, including what the employee wrote, can be found in our post on the earlier decision.

The NLRB previously held that the termination was unlawful.  That decision was subsequently among the hundreds that were vacated as a result of Noel Canning.  While the vast majority of these cases ended up coming out exactly the same way, the NLRB actually (and thankfully, for employers) reversed course in this case.

The NLRB side-stepped the question of whether the employee’s vulgar scribbling constituted protected conduct, assuming for the sake of argument that it was protected.  Instead, the NLRB focused only the termination.  It concluded that the termination was lawful because:

• the employer had a legitimate business interest in investigating the conduct, namely the enforcement of its anti-harassment policy and compliance with anti-discrimination laws;
• the employer conducted its investigation in a manner that was consistent with its purpose, truthfully explaining the purpose of the interview and tailoring its questions to avoid inquiry into protected conduct;
• there was no credible evidence that the investigation took place in the context of hostility towards union activity; and
• the employee had no reasonable basis on which to believe that the employer was trying to pry into his union activity, and thus he was not privileged to lie (as the NLRB had previously held).

The NLRB also examined the employer’s reason for termination.  The employer admitted that one reason for the termination was what the employee wrote.  Thus, the NLRB analyzed whether the employer would have fired the employee solely for the dishonesty.  The NLRB concluded that the employer would have done so as the employer was able to present evidence that it did so in a prior situation that did not involve union organizing.

The NLRB’s change of course is certainly welcome news for employers.  Given the NLRB’s reasoning, however, a two key points bear mention:

• Discipline consistently.  The employer won because it could demonstrate that other employees were fired for dishonesty alone.  If the employer had not been consistent on this issue, it could have undermined its position in the case.
• Investigate carefully.  A crucial fact in this case was the complaints from other employees about the scribbling, and the employer’s ensuing investigation, which itself was carefully crafted to focus only on the complained of conduct.  Had the employer overreacted to the complaints, for example, by launching a “dragnet” style investigation, the outcome would likely have been different.