By Jennifer A. Sabovik
LABOR UPDATE
During Bullard Law’s October 31, 2012 Annual Briefing, we addressed the confusing posture of the National Labor Relations Board with respect to at-will employment statements in employee handbooks. Our call out to the NLRB for clarification proved prescient; on the day of our Annual Briefing the NLRB’s Division of Advice issued two memorandums in which it found two at-will employment statements in two separate employer handbooks to be lawful under the National Labor Relations Act.
The NLRB’s Arizona Regional Office Had Caused Confusion
As explained during the Annual Briefing, the Board’s Regional office in Arizona had recently issued two cases suggesting that similar “at-will” statements in employer handbooks and acknowledgement forms were unlawful under the NLRA because they allegedly interfered with employee rights under Section 7 of the NLRA. This was a troubling development given the high number of employers that rely on such at-will statements to clarify their relationships with their non-union employees – especially in right to work states.
In addition to finding the at-will statements at issue to be unlawful, the Arizona cases also did not offer employers much guidance on how to craft lawful at-will statements. One of the cases settled before complaint was issued, and the other (
American Red Cross Arizona Blood Services Region) settled before the Board could review the ALJ’s finding that the statement was unlawfully broad.
The Division of Advice’s Memos Provide Guidance
On October 31, 2012 the Division of Advice issued two memorandums provide that much needed guidance. The memorandums were issued in the Rocha Transportation and Mimi’s Café cases.
In its
Rocha Transportation memorandum, the Division found the following at-will statement lawful:
“Employment with Rocha Transportation is employment at-will. Employment at-will may be terminated with or without cause and with or without notice at any time by the employee or the Company. Nothing in this Handbook or in any document or statement shall limit the right to terminate employment at-will. 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.”
In its
Mimi’s Café memorandum, the Division found the following at-will statement lawful:
“AT-WILL EMPLOYMENT
The relationship between you and Mimi's Café is referred to as ‘employment at will.’ This means that your employment can be terminated at any time for any reason, with or without cause, with or without notice, by you or the Company. 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 distinguished these at-will statements from the one found unlawful in American Red Cross. It found that these two statements, unlike the one at issue in American Red Cross, did 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 anyway. Instead, the provision[s] simply prohibit[] the Employer[’s] own representatives from entering into employment agreements that provide for other than at-will employment.”
In contrast, the at-will statement found unlawful in American Red Cross had included the following restrictive language: “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” The Division agreed with the Administrative Law Judge that the “use of the personal pronoun ‘I’” in this clause “more clearly involved an employee’s waiver of his Section 7 rights than the handbook provision[s]” upheld in Rocha Transportation and Mimi’s Café.
The bottom line is that the Board is more likely to find your at-will statement to be lawful the more it focuses on limiting your own executives and supervisors from altering the at-will nature of the employment relationship, as opposed to focusing on the inability of employees to alter their own employment statuses. Further, there is hope that the Board will continue to take a reasonable view of these necessary at-will statements, given the specific acknowledgement of the Division of Advice that “[i]t is commonplace for employers to rely on such policy provisions … as a defense against potential legal actions by employees asserting that the employee handbook creates an enforceable employment contract.” The Division of Advice also stated that “it is not the purpose of the Act to give the Board any control whatsoever over an employer’s policies, including his policies concerning tenure of employment, and that an employer may hire and fire at will for any reason whatsoever, or for no reason, so long as the motivation is not violative of the Act.”
Since Board law regarding at-will statements remains, as the Division said, “unsettled,” it asked its Regional Offices to send cases involving at-will statements in employer handbooks and policies to the Division for review.
Please do not hesitate to contact us for help in determining whether your at-will statements comply with the National Labor Relations Act.
