by Kristen E. Smith, Esq., Bond, Schoeneck & King, Syracuse
Late in 2012, the National Labor Relations Board (NLRB) left many employers scratching their heads—and pulling their employee handbooks off the shelf.
Just about every employee handbook includes a clear statement about at-will employment. Employment lawyers always hammer home the point that an at-will clause is essential to ensure the handbook doesn’t become an enforceable contract. Without a clear acknowledgment that employees could be fired for no reason or any legal reason, the argument goes, employees could come to rely on the handbook as a binding agreement that employers could not change going forward.
Then in stepped the NLRB. That’s the government board charged with enforcing the National Labor Relations Act (NLRA). Until recently, the NLRB pretty much limited itself to dealing with labor unions and the right to organize, leaving employers alone as long as no union activity was involved.
That’s all changed in the past year. Suddenly, the NLRB has started meddling in the way nonunion employers do business, too.
At-will statements
An NLRB judge recently ruled that an employer’s handbook acknowledgment, requiring employees to affirm the at-will nature of their employment, violated the NLRA. The case was American Red Cross Arizona Blood Services Region.
The language that was found to be unlawful stated: “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.”
If you check your handbook, chances are you have a very similar statement in it.
The judge reasoned that this language required employees to waive their rights to engage in protected concerted activity, because by agreeing that their at-will status could never change, they were essentially forgoing their right to make efforts or engage in conduct that could result in union representation and in a collective bargaining agreement. In other words, workers might think that even considering a union election would be futile. This waiver, according to the judge, would have a chilling effect on employees’ rights and was therefore unlawful.
More confusion
Throughout 2012, the NLRB added to the confusion over the Red Cross case. It continued to file and process complaints against employers for employment-at-will policies that appeared to contain the most routine language. For example, another NLRB 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.
Some relief
Thankfully, the NLRB has now provided some further guidance, and it appears it has tempered its position. The guidance 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 in which the head of the company and a union would together agree on a change to the at-will status of employees. 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 NLRB’s general counsel at the close of both Advice Memoranda, “the law in this area remains unsettled.”
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Kristen E. Smith is an attorney in the Labor and Employment Law practice at Bond, Schoeneck & King’s Syracuse office. Contact her at ksmith@bsk.com or (315) 218-8000.
