Hunton Employment & Labor Perspectives

The National Labor Relations Board’s (“NLRB”) General Counsel recently released an analysis of contested at-will employment clauses in two employment handbooks and ultimately concluded that neither violated the National Labor Relations Act (“NLRA”).

Employees had filed charges with the NLRB alleging that the at-will employment clauses contained in the employee handbooks distributed by Rocha Transportation, a California trucking company, and SWH Corporation d/b/a Mimi’s Café, a restaurant in Arizona, defined at-will employment so broadly that employees would reasonably think that they could not engage in activity protected by the NLRA.  The clause contained in Rocha Transportation’s handbook advised its employees that their employment is at-will and may be terminated at any time.  It also stated that “No manager, supervisor, or employee of Rocha Transportation 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.”  Mimi’s Café’s description of at-will employment in its handbook included the sentence: “No representative of the Company has authority to enter into any agreement contrary to the foregoing “employment at will” relationship.”  The NLRB’s Division of Advice prepared two memos which found that each of the clauses described above were lawful.

In reviewing these clauses, the NLRB explained that an employer violates the NLRA by maintaining work rules or policies that explicitly prohibit NLRA-protected union or concerted activity, such as joining a union or discussing terms and conditions of employment with coworkers.  If the rule does not explicitly restrict protected activities, an employer will nonetheless violate the NLRA if its employees would reasonably construe the language to prohibit such activity.  

Accordingly, the NLRB concluded that each company’s at-will employment clause was not overly broad.  The Division of Advice memo reasoned that Rocha Transportation’s at-will employment clause explicitly stated that the relationship can be changed, and thus, employees would not reasonably assume that their NLRA rights are prohibited.  The second advice memo found that the language contained in Mimi’s Café’s at-will employment clause was not unlawfully broad because the clause did not require employees to refrain from seeking to change their at-will status or to agree that the employment relationship could not be changed in any way.  Rather, it merely highlighted that the employer’s representatives are not authorized to change it. 

Furthermore, the advice memos distinguished these two clauses from one found in the American Red Cross Arizona Blood Services Region’s handbook.  In the latter, an NLRB administrative law judge found that an at-will employment clause contained in the American Red Cross Arizona Blood Services Region’s handbook which included the statement “I further agree that the at-will employment relationship cannot be amended, modified, or altered in any way” was unlawfully overbroad because it was essentially a waiver of the employee’s right to advocate concertedly to change his or her at-will employment status.  However, an advice memo was not issued on this case because it was settled before the Board had a chance to review it.

The NLRB’s Division of Advice memos are provided as guidance for employers and human resources professionals in a developing area that has recently drawn considerable attention.  Because this area of law remains somewhat unsettled, the NLRB has asked its Regional Offices to submit cases involving employer handbook provisions that restrict the future modification of an employee’s at will status for further analysis.