Recent NLRB Division of Advice Memoranda Regarding At-Will Disclaimers Helpful, but More Guidance Needed

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[author: Doug Hass]

We have updated clients about recent cases from the National Labor Relations Board (NLRB) that have invalidated employer at-will employment policies. In a win for employers, however, last week the NLRB’s Division of Advice (Advice) issued two advice memos recommending the dismissal of unfair labor practice charges alleging that employers’ at-will policies violated the National Labor Relations Act (NLRA). The new memos further muddle the confusing decisions issued by the Board, but hopefully signal that the General Counsel may start providing more predictable rulings that employers can use in adjusting their at-will policies.

Both memos dealt with policies that NLRB regional offices had alleged could chill employees’ exercise of their rights under the NLRA because they were overbroad. Both employers maintained policies with similar language. The transportation company in the first advice memo maintained a policy that informed employees that:

No manager, supervisor, or employee of [the Company] 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 second employer, a restaurant, maintained a similar statement in its at-will employment policy:

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 of Advice concluded that neither policy would “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” since:

[t]he provision does not require employees to refrain from seeking to change their at-will status or to agree that their at-will status cannot be changed in any way. Instead, the provision simply prohibits the [Employers’] own representatives from entering into employment agreements that provide for other than at-will employment.

The memoranda drew a distinction between the policies at issue and a Board ALJ’s February 2012 decision in American Red Cross Arizona Blood Services Region. In American Red Cross, Advice noted, the employer not only maintained a similar at-will policy, but also required employees to sign an acknowledgment form that required the employee to agree “the at-will employment relationship cannot be amended, modified or altered in any way.” Advice clarified that this acknowledgment, as written, waived employees’ rights “to advocate concertedly…to change his/her at-will status.” The two policies that Advice considered last week were not accompanied by similar acknowledgments.

Advice looked at beyond the plain language of the policies in reaching its conclusions. First, Advice determined that neither policy explicitly limited Section 7 rights. Advice also noted there was no information that either employer had used their policies to interfere with employees’ Section 7 rights. Absent evidence of interference with employee rights and without any overt statements targeting Section 7 rights in the policies themselves, Advice found that neither policy could be reasonably construed to prohibit Section 7 activity.

Advice acknowledged that its new guidance contradicted earlier actions, including the American Red Cross decision, and a complaint that issued earlier this year against Hyatt. With the law in this area unsettled, the memoranda directed the regional offices to submit all cases that involved similar at-will employee handbook provisions to Advice.

For employers and practitioners, the new memoranda provide some guidance, but perhaps not enough. Although some guiding principles may be extracted from Advice’s analysis, the memos are limited to their particular facts. Indeed, it is clear that this unsettled area of the law will develop on a case-by-case basis. We expect Advice, the NLRB’s administrative law judges, and the NLRB itself to issue more guidance regarding the lawfulness of at-will policies. What is clear, however, is that at-will policies are on the NLRB’s radar and we urge employers to review their policies now in anticipation of further NLRB scrutiny in this area.