NLRB CHALLENGES AT-WILL EMPLOYMENT POLICIES
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In two recent cases, the NLRB challenged at-will employment provisions contained in non-union employers’ employee handbooks, alleging that such policies have the effect of chilling protected employee activity. Taking this position is yet another example of the Board’s apparent effort to expand its role in regulating non-union employers, particularly with respect to employee handbook provisions.
Both cases involved standard at-will employment policy language, which the NLRB contended discouraged “concerted activity” amongst employees. In one case, the provision at issue stated that the employee “agrees that the at-will employment relationship cannot be amended, modified or altered in any way.” An Administrative Law Judge held that the provision constituted a “waiver” of the employee’s right to “advocate concertedly, whether represented by a union or not, to change his/her at-will status.” The ALJ went on to hold that such a clause could reasonably have the effect of discouraging an employee from exercising rights protected under the NLRA. The second policy challenged by the NLRB stated the following: “I understand my employment is at will … I acknowledge that no oral or written statements or representations regarding my employment can alter my at-will status, except for a written statement signed by me and [the company’s] Executive Vice-President or ... President.” The NLRB’s challenge to this provision was not ruled upon as the case settled prior to hearing.
Employee handbooks used by employers across the country have contained at-will employment provisions for decades, without any challenge by the NLRB as to the legality of such provisions under the NLRA. The reason for the NLRB’s focus on such provisions is unclear, but the effect of their actions cannot be ignored. Employers with at-will employment provisions in their employee handbooks should review them in light of the examples provided in the cases described above. These cases leave employers using such provisions with three options: (1) remove the provision and expose the employer to claims that the employee handbook or other verbal statement created an employment contract; (2) add language stating that the provision is not meant to discourage or restrict the exercise of rights protected by the NLRA; or (3) leave the provision unchanged and risk challenge by the NLRB.
At this point, the NLRB has not issued what it deems as acceptable disclaimer language for at-will employment provisions. Nor has an employer challenged the NLRB’s position with respect to such provisions. As a result, firm guidance on this issue is simply unavailable, although there is substantial doubt that the courts would support the NLRB’s position. However, employers can expect additional litigation and rulings that will provide instruction on the issue in the near future.