Nov 27, 2012

The NLRB Provides Guidance on Lawful At-Will Employment Language

On October 31, 2012, the National Labor Relations Board (“NLRB”) and its Acting General Counsel released two advice memoranda analyzing the at-will employment clauses in two employee handbooks. Charges had been filed with the NLRB alleging that the language defining “at-will employment” in both handbooks violated employees’ rights by leading employees to believe that they could not engage in protected concerted activity under the National Labor Relations Act (“NLRA”). Protected concerted activities include actions such as joining a union, acting in concert with other employees to try to change a term or condition of employment, or discussing employment terms with co-workers. However, the NLRB advice memoranda found that the two employee handbooks did not violate the NLRA and were not overbroad.

The first employee handbook, for California-based trucking company Rocha Transportation, stated that employment with the company was at-will and “[n]o manager, supervisor, or employee of Rocha Transportation has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will.” The handbook further notes, “Only the president of the Company has the authority to make any such agreement and then only in writing.” The second employee handbook at issue, for Arizona restaurant Mimi’s Cafe, included a similar statement regarding at-will employment: “[n]o representative of the Company has authority to enter into any agreement contrary to the foregoing ’employment at-will’ relationship.”

In both cases, the NLRB found that the language of the handbooks would not “reasonably be interpreted to restrict an employee’s Section 7 right to engage in concerted attempts to change his or her employment at-will status.” Specifically, the clauses did not establish that the at-will status of the relationship could not be changed in any manner but instead focused on the fact that the employees and representatives of the two companies are not authorized to modify or change an employee’s at-will status.

The advice memoranda from the NLRB distinguished the two employment policies at issue from an at-will clause that was found overly broad by an NLRB administrative law judge (“ALJ”) earlier this year. As we previously reported, an ALJ found an American Red Cross Arizona Blood Services Region handbook provision overly broad and in violation of the NLRA where it included the statement, “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” In distinguishing the policies at issue here from the American Red Cross decision, the NLRB emphasized the use of “I,” a personal pronoun, in the Red Cross’s handbook provision. The NLRB found that the use of this personal pronoun in particular was the basis for finding that the American Red Cross provision “more clearly involved an employee’s waiver of [his or her] Section 7 rights.”

Recognizing that the law on at-will employment provisions is still unsettled, the NLRB Acting General Counsel requested that regional offices submit all cases they receive that involve similar employee handbook provisions to the NLRB’s Division of Advice. While the two NLRB advice memoranda offer some guidance and reassurance to employers, it is important to remember that the advice memoranda are not binding interpretations of the law and do not carry the same authority as a decision by the NLRB. Employers should review their policies and employment handbooks in light of the guidance offered by these advice memoranda to ensure that their at-will employment policies are in compliance with the NLRA.

If you have any questions about these issues, please contact your employment counsel at Smith, Gambrell, & Russell, LLP.

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