Foley & Lardner LLP

23 July 2012
Labor & Employment Law Perspectives

Is the Typical "At-Will" Policy Vulnerable to Attack?

The National Labor Relations Act (NLRA) covers employees who are not represented by unions, as well as those who are. Until recently, the NLRB, the federal agency charged with enforcing the NLRA, has focused its attention on those employees who are represented by unions, or who are seeking to be so represented.Recently, however, the NLRB has signaled its intent to broaden its focus and address issues that affect unrepresented employees. Thus, the NLRB has become involved in the very topical subject of social media policies and has signaled an intent to “police” such policies to determine whether they fall afoul of the NLRA. (See previous Labor & Employment Law Perspectives: May 21, 2012) . On May 30, 2012, the Acting General Counsel issued a report in which he outlined the agency’s recent review of several employer social media policies and reported on one case where the NLRB concluded that the entire policy was invalid because it interfered with the employees’ rights to “discuss wages and working conditions with co-workers.”

On June 18, 2012, the NLRB announced the launch of a Web site that “describes the rights of employees to act together for their mutual aid and protection, even if they are not in a union.”

However, in a move likely to cause considerable consternation among many employers, the NLRB appears to be turning its attention to “at-will” policies, intimating that such policies may be invalidated. Last month, the NLRB’s Acting General Counsel observed that a policy containing a broad statement that an employee will remain at will unless that status is changed by a written document signed by the employer’s chief executive may violate the NLRA. The NLRB’s Acting General Counsel observed that the employee might conclude that even union representation could not change his/her status and, therefore, seeking such representation would be futile. Indeed, in the past several months, the NLRB filed Unfair Labor Practice Complaints in Arizona against two prominent employers, in each instance alleging that they maintained “over-broad” at-will policies. In one case, the Administrative Law Judge agreed that the employer’s policy did violate the Act and, in the second, the employer agreed to a settlement that admitted the same.

The thousands of employers who have such policies face something of a dilemma. First, the NLRB’s prosecution to date has been limited to Arizona and, moreover, the issue has yet to be decided by the Board, much less the courts, where it is likely to have a much rougher passage. As a result, many employers may decide to adopt a wait and see approach. For those who decide to be more proactive, there should be ways to revise the policy to make it compliant, at least in the NLRB’s eyes. For example, instead of stating that the policy can be changed only by the CEO, it could provide that it can be modified only by a valid, written agreement. Regardless of whether or not there is a decision to take action at this time, employers should be aware that a long-standing cornerstone of the typical at-will policy is under attack.