NLRB General Counsel Suggests Continued Life for Employment at will Disclaimers

Non-union employers who have an employee handbook almost universally have a section setting out the employment relationship as being at will (e.g. “You are employed at will and may be terminated at any time with or without notice and reason.”) and a further provision limiting the right to alter this status. (e.g. “Only the president can enter into any agreement, altering your at will status.”)

The statement of the at will relationship has generally gone unchallenged by the NLRB.  In February, 2012, however, an Administrative Law Judge found an at will statement providing “I further agree that the at will employment relationship cannot be amended, modified, or altered in any way” to be unlawful as a waiver of Section 7 rights to concertedly try to change the at will status.  American Red Cross, Case No. 28-CA-23343 (settled after trial).  The employer community feared the ALJ’s decision was the beginning of the end for the at will disclaimer.

Employers, however, received a pleasant surprise when General Counsel recently issued Advice Memos in which he directed dismissal of two cases involving at will disclaimers.  Both cases focused on whether the policies violated Section 8(a)(1), one by providing limited authority in providing only the president could modify the at will relationship, Rocha Transportation, 32-CA-6086799 and the other no authority to do so, Mimi’s Café, Case No. 28-CA-084365

In recommending dismissal, General Counsel noted neither policy expressly prohibited or could be reasonably interpreted as implying employees could not attempt to change the at will status.  The Board further noted in both cases such language is “commonplace” for employers to rely on policy provisions such as each of these in defending actions asserting an employee handbook is an enforceable employment contract.

In distinguishing  the ALJ’s American Red Cross decision, General Counsel emphasized the ALJ’s “essentially a waiver” conclusion was based on the use of the personal pronoun “I” in the disclaimer and stated this case “more clearly involved an employee’s waiver of his Section 7 rights” than the handbooks in Mimi’s Café and Rocha Transportation.  General Counsel further directed the Regions to submit all employee handbook provisions which restrict “future modification” of the at will status to Advice because the law remains “unsettled.”

For now, it appears properly written at will disclaimers which do not expressly or impliedly restrict an employee attempting to change his status in the future, i.e. engage in union organizing may be allowed to live on by the Board.  If so, it is good news for employers because a contrary result could mean a flood of “employee handbook is a contract” litigation.

For more information, contact Larry Downs or a member of the Firm’s Labor & Employment Law practice team.

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