NLRB’s Division of Advice Finds Two At-Will Employment Policies Lawful

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Advice memoranda describe limits of potential challenges to at-will employment policies under the NLRA.

On October 31, the National Labor Relations Board's (NLRB's or Board's) Division of Advice issued two memoranda regarding at-will employment policies. The Board's Acting General Counsel has recently prosecuted charges alleging that at-will employment policies violate the National Labor Relations Act (NLRA or the Act) if the disclaimer can be interpreted as a waiver of employees' right to seek change to the at-will policy through collective bargaining. These cases provided little guidance for employers on whether and how they should revise language commonly found in employee handbooks and employer policies that describes the employment relationship as "at will." The two October 31 Advice Memoranda provide some guidance and should give employers a better understanding of the circumstances in which at-will policy language will, or will not be, challenged under the NLRA.

Prior Cases Involving At-Will Employment Policies

In American Red Cross Arizona Blood Services Region, an NLRB administrative law judge found that the employer had violated the NLRA by maintaining the following language in a form that employees were required to sign: "I further agree that the at-will employment relationship cannot be amended, modified or altered in any way."[1] The judge concluded that this language effectively required an employee to waive his or her Section 7 rights "to advocate concertedly" and change his or her at-will status. In another case earlier this year, Hyatt Hotels Corporation settled an NLRB complaint by agreeing to change policy language that required an individual contract signed by the employee and an executive to alter the employee's at-will status.

Based on the American Red Cross and Hyatt cases, many employers were concerned that the NLRB's Acting General Counsel would aggressively challenge many forms of at-will employment policies.

The October 31 Advice Memoranda

In Rocha Transportation, No. 32-CA-086799, the Division of Advice,[2] concluded that the NLRB regional office should dismiss a charge directed at the following policy language:

No manager, supervisor, or employee at 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.

The Division of Advice determined that this language "would not reasonably be interpreted to restrict an employee's Section 7 right[s]." The Division of Advice explained that "the provision explicitly permits the Employer's president to enter into written employment agreements that modify the employment at-will relationship, and thus encompasses the possibility of potential modification of the at-will relationship through a collective-bargaining agreement that is ratified by the Company president."

Similarly, in SWH Corporation (Mimi's Café), No. 28-CA-084365, the Division of Advice concluded[3] that the NLRB regional office should dismiss a charge directed at the following language:

No representative of the Company has authority to enter into any agreement contrary to the foregoing "employment at will" relationship.

This language presented a closer question of whether employees could read the provision to restrict Section 7 rights as in American Red Cross. The Division of Advice explained, however, that the provision simply highlighted the employer's policy that its own representatives may not modify the at-will relationship and reinforced that the employer's handbook did not create an express or implied contract of employment. The provision did not require employees to refrain from seeking a change in at-will status or to agree that their at-will status could not be changed. On this basis, the Division of Advice distinguished the American Red Cross case. The Division of Advice also specifically pointed out that the American Red Cross case was settled prior to Board review, suggesting that the Division of Advice does not feel constrained to follow the administrative law judge's decision in that case.

Implications

The Board's recent foray into the world of nonunion employee handbooks—including at-will employment, social media, and confidentiality policies—has led to uncertainty in the employer community regarding a host of employer policies that are not intended to address employee rights under the NLRA, but could be construed to "chill" those rights.[4] Although memoranda written by the Division of Advice are not binding precedent, they provide valuable insight as to the circumstances in which the Acting General Counsel will prosecute an unfair labor practice charge. The two October 31 Advice Memoranda indicate that the Acting General Counsel's prosecution of charges concerning at-will employment policies will not be as wide-ranging as feared, and they provide some guidance to employers as to policy language that should not raise NLRA concerns.


[1]. Am. Red Cross Ariz. Blood Servs. Region, No. 28-CA-23443 (Feb. 1, 2012), available here.

[2]. View the October 31 Rocha Transportation Advice Memorandum here.

[3]. View the October 31 Mimi's Café Advice Memorandum here.

[4]. For more information on recent NLRB decisions regarding employee handbooks, see our October 2, 2012, LawFlash, "NLRB Strikes Down Employee Handbook Language and Issues First Social Media Decision," available here.