[author: Beth P. Zoller, XpertHR Legal Editor]
Finally, the National Labor Relations Board (NLRB) has equipped employers with more concrete guidance in crafting their at-will employment policies. In two Advice Memos from the General Counsel of the NLRB's Office Division of Advice (Division) - SWH Corporation (Mimi's Café), No. 28-CA-084365 (October 31, 2012) and Rocha Transportation, No. 32-CA-086799 (October 31, 2012) - the Division found the at-will policy provisions at issue to be lawful and comply with Section 7 of the National Labor Relations Act (NLRA).
In prior cases, the NLRB held that certain at-will policies were overbroad and in violation of the NLRA, noting that these policies could be interpreted to restrict both union and non-union employees from engaging in collective action to change their wages, hours and working conditions (protected concerted activity). In these cases, however, employers were never provided with sample language that would comply with the NLRA. See Overly Broad At-Will Disclaimer May Violate NLRA in Both Union and Non-Union Workplaces. Fortunately, in both SWH Corporation (Mimi's Café), No. 28-CA-084365 (October 31, 2012) and Rocha Transportation, No. 32-CA-086799 (October 31, 2012), the NLRB clarified its position and has now provided employers with some examples of language it considers lawful.
In SWH Corporation (Mimi's Café), the Division held that the following policy language was lawful:
The relationship between you and Mimi's Cafe is referred to as "employment at will." This means that your employment can be terminated at any time for any reason, with or without cause, with or without notice, by you or the Company. No representative of the Company has authority to enter into any agreement contrary to the foregoing "employment at will" relationship. Nothing contained in this handbook creates an express or implied contract of employment.
The Division held that this language did not violate the NLRA because it could not be reasonably interpreted to restrict employees from engaging in protected concerted activity to change their at-will status or require employees to agree that their employment relationship cannot be changed in any way. Instead, the policy explicitly stated that the employer's representatives did not have the power to change an employee's at-will status and that this power resided with the employer only. The Division recognized that at-will policy provisions are commonly used by employers to defend against potential legal actions by employees claiming that the handbook constitutes an enforceable employment contract.
Similarly, in Rocha Transportation, No. 32-CA-086799 (October 31, 2012), the Division evaluated the following language:
Employment with Rocha Transportation is employment at-will. Employment at-will may be terminated with or without cause and with or without notice at any time by the employee or the Company. Nothing in this Handbook or in any document or statement shall limit the right to terminate employment at-will. No 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. Only the president of the Company has the authority to make any such agreement and then only in writing.
In this instance, the Division held that the language was not overbroad and complied with the NLRA because it did not explicitly restrict employees from engaging in protected concerted activity. In fact, it specifically recognized that the at-will relationship could be changed . While the language prohibited the employer's representatives from entering into any other employment agreements contradicting the employee's at-will status, it explicitly recognized the employee's right to engage in collective activity and enter into a written employment agreement with the president modifying their at-will status.
The Division distinguished these two policy provisions from a prior policy provision an Administrative Law Judge found unlawful which stated that "I agree that the at-will relationship cannot be amended, modified, or altered in any way." See NLRB v. American Red Cross, (NLRB 2012).Unlike that policy, the language in the Rocha and Mimi's Café policies permitted the employees' at-will employment status to be changed and recognized the right of employees to engage in protected concerted activity
Advice for Employers
Based on this revised guidance from the NLRB, employers should:
Review their at-will employment policy provisions and revise any language to mirror the language that the NLRB found lawful;
Eliminate any language that restricts an employee from seeking to change his or her at-will employment status or requires an employee to agree his or her employment status cannot be changed in any way as this would essentially be a waiver of the employee's right to engage in protected concerted activity;
Consider including language recognizing that the employees' at-will employment status may be changed and recognizing the right of employees to engage in protected concerted activity; and
Avoid overly broad and ambiguous language that could be construed as restricting employees from engaging in collective action to change their employment status.
Overly Broad At-Will Disclaimer May Violate NLRA in Both Union and Non-Union Workplaces
Recruiting and Hiring > Employment At-Will
Recruiting and Hiring > Terms of Employment > The At-Will Employment Relationship
Employee Management > Employee Handbooks - Work Rules - Employee Conduct
At-Will Employment Policy
At-Will Employment Acknowledgement Form
How to Create an Employee Handbook
How to Amend an Employee Handbook
Employee Handbook Acknowledgement and Consent Form
How to Avoid an Implied Contract in an Employee Handbook