NLRB Provides Guidance Regarding Its Position On Employment-At-Will Policies

Earlier this year, many employers were left scratching their heads after a National Labor Relations Board Administrative Law Judge ruled, in American Red Cross Arizona Blood Services Region, that an employer’s handbook acknowledgment, requiring employees to affirm the at-will nature of their employment, violated the National Labor Relations Act. The language that was found to be unlawful in Red Cross stated:

I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.

The ALJ reasoned that this language required employees to waive their Section 7 rights to engage in protected concerted activity, because by agreeing that their at-will status could never change, they were essentially foregoing their right to make efforts or engage in conduct that could result in union representation and in a collective bargaining agreement. This waiver, according to the ALJ, would have a chilling effect on employees’ rights, and was therefore unlawful.

The confusion and concern among employers continued, as the Board continued to file and process complaints against employers for employment-at-will policies that appeared to contain the most routine at-will language. For example, in late February, another Board complaint challenged the following language:

I acknowledge that no oral or written statements or representations regarding my employment can alter my at-will employment status, except for a written statement signed by me and either [the Company’s] Executive Vice-President/Chief Operating Officer or [the Company’s] President.

The complaint challenging this language was settled before the Board issued a decision, providing employers no guidance as to whether it was time to revise their handbooks. Thankfully, the Board has now provided some further guidance, and it appears they have tempered their position. This “treat,” issued on Halloween, came in the form of two Advice Memoranda (Case 32-CA-086799 and Case 28-CA-084365) issued by the Board’s Division of Advice taking the position that language similar to that above is lawful. For example, the following language was found acceptable:

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 memorandum explains that this language is lawful because it is not as absolute as the language in the Red Cross case. It explicitly permits the president to enter into written employment agreements, thus providing for the possibility of potential modification of the at-will relationship through a collective bargaining agreement. Additionally, the language is not written in a way that requires employees to waive their rights.

For now, employers should consider reviewing the at-will language in their employee handbooks. Language that simply describes the at-will status of employees, and states that it can only be altered in writing by an executive should not cause concern for now. However, if the at-will language is written in more absolute terms, providing that the at-will relationship can never be changed under any circumstances, it may be time to revise that policy. However, as warned by the Board’s General Counsel at the close of both Advice Memoranda, “the law in this area remains unsettled.” We will continue to provide updates on this blog as this issue develops.