NLRB OFFERS GUIDANCE ON ACCEPTABLE “AT-WILL” EMPLOYMENT LANGUAGE
What’s an employer to do? The courts have held that an employee handbook can create an employment contract unless it has a specific disclaimer that the employer maintains an employment at-will policy. On the other hand, the National Labor Relations Board (“NLRB”) has found employers guilty of unfair labor practices because it determined that an at-will disclaimer chilled employees’ rights to organize and enter into collective bargaining agreements. Recently, the NLRB’s Office of General Counsel issued two Advice Memorandums that offer much-needed guidance to employers wishing to include at-will employment disclaimers.
It’s a common policy for employers to include in employee handbooks language that makes it clear to the employee that the employment relationship is “at-will,” and that nothing in the handbook relating to employer expectations, discipline, or the like is to be construed as creating an employment contract. Some employers, however, have found themselves in hot water when the NLRB has determined that the at-will language could be understood by employees to restrict their rights under the National Labor Relations Act (“the Act”).
For example, just this year, an administrative law judge found that the following language violated the Act: “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” The judge found that an employee, by using the personal pronoun “I,” was essentially waiving his or her right to change the at-will status through collective bargaining.
Acknowledging that this area of labor law is “unsettled,” the NLRB’s Office of General Counsel on October 31, 2012, issued two Advice Memorandums, both of which found the at-will disclaimer in particular employee handbooks to be acceptable.
The first memo found that restaurant operator Mimi’s Café’s language could not be reasonably construed as to limit the employees’ rights under the Act. Mimi’s Café’s employee handbook included the following language: “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.”
An employee charged that the first sentence quoted above was overbroad and would reasonably chill employees’ exercise of their rights protected by the Act. The NLRB’s General Counsel disagreed, noting that the provision does not require employees to refrain from seeking to change their at-will status or to agree that the at-will status cannot be changed in any way. Instead, this language merely prohibits the employer’s own representatives from modifying the at-will status. The clear meaning of the first sentence is to reinforce the unambiguous at-will policy contained in the second sentence.
The second memo addressed the following language in Rocha Transportation’s employee handbook: “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.” The General Counsel also found that this language could not be reasonably construed to restrict employees’ rights under the Act. Similar to the language in Mimi’s Café’s handbook, this provision does not require employees to refrain from seeking to change their at-will status or to agree that the at-will status cannot be changed in any way. Again, the provision simply prohibits any of the employer’s representatives besides its president from entering into any agreement that would alter the at-will status.
Although these Advice Memorandums are not binding legal precedent, employers considering drafting or revising at-will provisions in employee handbooks can gain a couple of takeaways from them. First, word the language so that you do not restrict the employee (“I agree . . .”), but instead, restrict your own representatives (“No representative of the Company has the authority to modify the at-will status. . .”) Second, do not include any language that the at-will status cannot be altered “in any way.” Under the Act, employees have the right to enter into a collective bargaining agreement that would alter any at-will employment relationship. Language that can be construed as waiving or restricting this right may be found to be in violation of the Act. Finally, consider consulting with your legal counsel before implementing a policy in order to get the latest updates on this unsettled area of the law.