The National Labor Relations Board (“NLRB”) has made headlines in the last few years with its close scrutiny of workplace social media policies. However, making something of a quieter splash, the NLRB has also been scrutinizing another practice that, in its view, has the potential to “chill” employee rights in violation of the National Labor Relations Act (“NLRA”): at-will employment clauses in employee handbooks.
The issue of at-will employment clauses came to the fore in 2012, when an administrative law judge found that the following language in an at-will provision in an employee handbook violated the NLRA: “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” In the judge’s opinion, this acknowledgement, which followed a standard description of the at-will employment relationship, violated the NLRA because it required the employee to agree that the relationship could not be changed and amounted to a waiver of the employee’s right to advocate for a change in status.
More recently, however, in a case called Windsor Care Centers, the NLRB’s Office of General Counsel (“Office”) found that an at-will clause was not unlawful where it provided the following language at the end of the clause:
Only the Company President is authorized to modify the Company’s at-will employment policy or enter into any agreement contrary to this policy. Any such modification must be in writing and signed by the employee and the President.
In Windsor, the Office explained that the NLRB applies a two-step inquiry to determine whether a work rule would reasonably tend to chill employees in exercising their rights. First, a rule is unlawful if it explicitly prohibits employees from exercising their rights under the NLRA. Second, a rule is unlawful even if it does not explicitly restrict protected activities if: (1) employees would reasonably construe the rule to prohibit protected activity; (2) the rule was created in response to union activity; or (3) the rule has been applied so as to restrict protected activity.
Applying this two-step inquiry, the Office found that the at-will clause in Windsor did not explicitly restrict protected activities and that the company had neither created the rule in response to union activity nor applied it in a discriminatory manner. The Office therefore concluded that the clause would be unlawful only if employees would reasonably construe it to prohibit protected activity. According to the Office, the clause could not reasonably be construed as restrictive, because the language “simply describes the method by which employees can, at present, create an enforceable employment contract with the employer modifying their at-will status.” Because the language did not require employees to agree that their status could not be changed, the Office concluded the at-will clause was lawful and distinguishable from the clause at issue in the 2012 case, American Red Cross Arizona Blood Services.
In light of the NLRB’s recent activity, businesses should revisit the language in their employee handbooks and consider revising at-will provisions that do not allow for any modification of an employee’s at-will status.