Foley & Lardner LLP

12 November 2012
Labor & Employment Law Perspectives

NLRB Offers Advice on At-Will Employment Handbook Language

It is a good, standard practice for employers to include a provision in their employee handbooks, where applicable, to clarify that the terms of employment in the handbook do not alter the at-will status of the employer’s relationship with its employees. Such at-will employment provisions are useful as a defense to potential legal actions by employees asserting that employee handbooks create enforceable employment contracts. Some concern over this practice, however, was created by an NLRB Administrative Law Judge’s February 1, 2012 decision in American Red Cross Arizona Blood Services Region (Case 28-CA-23443). As we reported previously, in American Red Cross, the judge ruled that having an employee sign an acknowledgement form stating, “I further agree that the at-will employment relationship cannot be amended, modified, or altered in any way” acted to restrict an employee’s exercise of her rights under the National Labor Relations Act to organize a union and bargain collectively. The parties settled their dispute prior to the NLRB’s review of the judge’s decision, however, leaving the NLRB’s view on this ruling unknown. On October 31, 2012, the NLRB’s acting general counsel issued two advice memos that clarify the scope of the American Red Cross ALJ decision by distinguishing the language from two other employee handbooks and finding that they did not act to chill employees’ Section 7 rights. In one of the cases, Rocha Transportation’s employee handbook contained language stating that employment with Rocha is at-will, and that only the president of the company had the authority to make a written agreement for employment. In the other case, Mimi’s Café’s employee handbook contained a provision stating that the relationship between Mimi’s and its employees is at-will, that nothing in the handbook creates an express or implied contract of employment, and that no representative of the company has authority to enter into any agreement contrary to this employment at-will relationship. In the advice memos, the NLRB distinguished these provisions from the one at issue in American Red Cross on the basis that neither Rocha’s nor Mimi’s handbook language foreclosed the employees from seeking to select a collective-bargaining representative and bargain collectively per their Section 7 rights. The point of distinction is that the form to be signed in American Red Cross was worded as an affirmative “waiver” of the employee’s rights to seek modification of the employment relationship through the use of the “I further agree” language. In contrast, the provisions in Rocha’s and Mimi’s handbooks merely informed employees as to the authority (or lack thereof) of company representative to agree to an employment contract.

Based on American Red Cross and the Rocha and Mimi’s Cafe advice memos, employers with or considering adding “employment at-will” provisions in their employee handbooks should be careful that they not include language that could be construed to act as an affirmative “waiver” by employees of what they can do. Provisions should be worded in terms of what the relationship is and what authority the employer’s representatives have or do not have to modify that relationship. We recommend that employee handbooks generally and “employment at will” clauses specifically should be reviewed by an experienced labor and employment attorney to help ensure that such handbooks are compliant with the requirements of the Act, as well as the decisions and practices of the NLRB.