Legal Alert: Snap Back to Reality: NLRB Steps Back from the Ledge on Employment At Will

Date   Nov 5, 2012

Following recent attacks on the employment at-will doctrine by one of the NLRB's Regions, the Board has stepped its position back somewhat, issuing two Advice Memorandums through its Associate General Counsel. 

Executive Summary: Following recent attacks on the employment at-will doctrine by one of the NLRB's Regions, the Board has stepped its position back somewhat, issuing two Advice Memorandums through its Associate General Counsel.  In these opinions, the Board's Associate General Counsel takes the position that many employment at-will provisions may not violate employees' Section 7 rights. 

As discussed in our previous Legal Alert on this issue, Region 28 in Arizona has begun pursuing unfair labor practice charges against employers with respect to their employment at-will policies and acknowledgments.  However, in two recent Advice Memorandums issued by Barry J. Kearney, Associate General Counsel for the National Labor Relations Board, the Board held that employment at-will provisions do not necessarily violate employees' Section 7 Rights.  

In SWH Corp. d/b/a Mimi's Café, Case 28-CA-084365, the employer's at-will provision stated as follows:

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.

(emphasis added).  In Rocha Transport., Case 32-CA-086799, the employer had very similar language to that of Mimi's Café, although Rocha Transportation's at-will provision did have an exception that permitted the president of the company to enter into an agreement with an employee to make his or her employment for a specified period, provided such an agreement was in writing.  The employer in Rocha also had similar at-will language in its handbook acknowledgment, which employees were required to sign.  Interestingly, one of these unfair labor practice charges was pursued by Region 28, the region that had previously attacked employment at will. 

Distancing itself from the overly aggressive posture of Region 28, AGC Kearney cautioned that language in a handbook should not be read in isolation.  Instead, the context of the language should be considered.  He further noted that, when a handbook policy cannot be read to explicitly restrict employees' Section 7 rights or was not otherwise instituted in response to employees' Section 7 activity, the relevant policy is only unlawful if an employee "would reasonably construe it in context to restrict Section 7 activity." 

As for the employment at-will provisions in these two cases, AGC Kearney determined that they did not violate Section 7.  First and foremost, neither provision sought to restrict employees from seeking to change their at-will status.  They simply prevented company representatives from doing so.  Additionally, the purpose of the provisions was to make it clear to employees that handbooks are not to be treated as enforceable contracts for employment; the provisions were not meant to restrict employees' Section 7 rights.  Accordingly, when the at-will provisions are considered in context, employees would not reasonably construe these provisions as preventing them from selecting a collective bargaining representative or bargaining collectively for a contract, two of the lynchpins of Section 7 activity.

Unfortunately, AGC Kearney did not go so far as to hold all at-will policies lawful.  In both Advice Memorandums, he qualified the Board's position by asserting that other handbook provisions could still violate Section 7.  For example, the language "I further agree that the at-will employment relationship cannot be amended, modified, or altered in any way," would violate Section 7 because "use of the personal pronoun ‘I'…was ‘essentially a waiver'" by the employee of his or her Section 7 rights.   

In conclusion, AGC Kearney admitted that the law on the issue was "unsettled," so he requested all of the Board's regions submit all cases involving handbook provisions that restrict modifications of employees' at-will status to the Board's Division of Advice. 

Bottom Line:  There is one major positive to take away from these Advice Memorandums – that handbooks' at-will provisions are not per se violations of employees' Section 7 rights.  After such an unsettling move by Region 28, it is reassuring that the Board's Division of Advice is taking a more measured approach to the issue.  Hopefully, Region 28 proves to be nothing more than a bad apple.  However, AGC Kearney's words regarding the fact that the issue remains "unsettled" could forecast darker days ahead.  By asking all the regions to submit their cases regarding at-will provisions to the Board's Division of Advice, the Board may be laying the groundwork to definitively rule on the issue.  Have cooler heads prevailed?  Or is this just the calm before the storm?  Given the anti-business slant of the current Board, let's hope it is the former.             

If you have any questions regarding the issues addressed in this Alert or other labor or employment related issues, please contact the author, Heath Edwards, or the FordHarrison attorney with whom you usually work.