Employment-at-Will: Walking the Fine Line, Part II
Previously on The Emplawyerologist we explored how an employer can avoid unwittingly creating an implied contract that eradicates employment at-will status. The most effective way to do so is to include clear, unambiguous and prominent disclaimers in an employment contract and in all handbooks and policies and procedures manuals. So far so good, right? Unfortunately, employers may have to confront a new “wrinkle”— the National Labor Relations Board (NLRB). What??? Doesn’t the NLRB only control “union shops”? Nope. Wrong answer. Sorry. Before we go any further, let’s debunk that myth and introduce this new character to the cast.
Who/what is the National Labor Relations Board? The NLRB is a federal government agency charged with conducting elections for labor union representation and investigating and remedying unfair labor practices. What is an “unfair labor practice”? While a labor practice may involve union activity, it can also involve occurrences of protected concerted activity.
The NLRB believes that this second category allows it to scrutinize your employment practices even if you do not have unionized employees, so let’s power through! Activity is “concerted” under the National Labor Relations Act (NLRA) if it involves either a) two or more employees acting together to improve wages or working conditions, or b) a single employee either involving or acting on behalf of other employees to improve wages or working conditions of employees beyond those taking action. Such activity is protected under Section 7 of the NLRA. The employees need not be union members, though their activities could include organizing or attempting to organize all employees into a union. (Click here if you want to learn more about these points.) So there you have it! Protected concerted activity applies to non-unionized employees, and that is how the NLRB can be a factor in your lives as employers. Some of you may be wondering what any of this has to do with employment-at-will. Let’s look briefly at two NLRB cases from Arizona:
In NLRB v. Red Cross Arizona Blood Services the NLRB filed a complaint that the following employee handbook provision was an “unfair labor practice” under Section 8(a)(1) of the NLRA:
I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.
The Administrative Law Judge (ALJ) reasoned that this provision could be interpreted as limiting an employee’s rights to engage in concerted activity to change their at-will status, such as organizing a union. (Union members are protected by a collective bargaining agreement, which usually only allows termination for “just cause” or other specific circumstances.) While the Red Cross revised the disclaimer, the ALJ still made the Red Cross tell employees that the disclaimer was revoked and removed from the handbook acknowledgement form and post notice to the employees, telling them that the Red Cross would not violate the employee’s NLRA rights.
Similarly, in NLRB v. Hyatt Hotels, the NLRB Acting General Counsel (AGC) filed a complaint, alleging that the Hyatt’s employee handbook acknowledgement claim violated the NLRA’s protection of concerted activity. Here is the offending provision:
I understand that my employment is at-will.
I acknowledge that no oral or written statements or representations regarding my employment can alter my at-will employment status, except for a written statement signed by me and Hyatt’s president or executive vice president/COO.
The parties settled this matter without a hearing; Hyatt agreed to delete the disclaimers from the handbook, and notify the employees. Since this matter settled, neither an ALJ nor the NLRB rendered an opinion regarding the AGC’s contention that the disclaimer language unlawfully interfered with employees’ rights under the NLRA.
Before we get to the take-away’s, let’s note some observations. Both cases came from the NLRB’s Regional Office in Phoenix, Arizona. Also, no court has actually rendered an opinion on the NLRB’s stance. Lafe Solomon, the NLRB’s AGC, has announced that the NLRB will be focusing attention on at-will disclaimers. As of today, there is no “law of the land” prohibiting an employer from using an at-will disclaimer in an employee handbook. Only one of the two cases produced a ruling from an ALJ, which the employer apparently decided not to appeal. The cases therefore reflect the NLRB’s opinion that such disclaimers may violate the NLRA. Also, both cases involved very broadly written disclaimers in employee acknowledgement forms that accompanied the employee handbooks. Neither of these cases involved at-will clauses in the actual handbook, nor those contained in employment contracts. It is not clear, at this time, whether the NLRB would take issue with those.
What can employers take away from these two cases, and from AGC Solomon’s announcement?
1. Avoid language that states that at-will employment can never be altered in any way.
2. You may want to make sure your disclaimer acknowledges that at-will employment may be subject to applicable federal and state laws.
3. You may even want to state that the disclaimer in no way limits an employee’s rights under the NLRA to engage in protected, concerted activity.
There is currently no law requiring employers to advise employees of their rights to either organize a union or engage in concerted protected activity under the NLRA. Some of you may feel that language referring to NLRA rights ends up doing exactly that. You may not want to. Do you have to? No. If you do not mind “rolling the dice” and hoping that the NLRB’s reach goes no further than the two Arizona cases, then you can either leave your disclaimers the way they are, or simply use the suggestion in #2 above.
This time next week on The Emplawyerologist: Employment-at-Will: Walking the Fine Line, Part III will discuss statutory exceptions to employment-at-will. So see ya’ then, same time, same station!
You can read about The Emplawyerologist’s author, Janette Levey Frisch, by clicking here.
Disclaimer: This article and its contents are for informational purposes only, is not intended as legal advice, nor does it create an attorney-client relationship. Always consult with local, competent employment counsel on any issue discussed in this or any other article on The Emplawyerologist.