NLRB Memo Clarifies At-Will Employment Position

Contributed by Terry Fox

We recently wrote about the NLRB taking the position that at-will employment clauses with employer’s personnel handbook violated the collective action provisions of Sections 7 and 8 of the National Labor Relations Act (NLRA).  On October 31, 2012, the NLRB’s Office of the General Counsel issued Advice Memoranda in two cases where employees claimed at-will statements violated the NLRA. 

In the case of Rocha Transportation, CA.32-CA-086799, the employer’s handbook language stated that employment is at will, and provided 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.” Advice Memorandum, p.1.

That language was found NOT to violate the NLRA’s guarantees of collective action by employees due to the language only precluding certain employer’s representatives from entering into a contract for a specified term.  Thus, the General Counsel concluded, the provision could not be read by an employee to preclude collective activities. 

The handbook provision at issue in SWH Corporation, 28-CA-084365, stated “No representative of the Company has authority to enter into any agreement contrary to the foregoing ‘employment at will’ relationship.” Advice Memorandum, p.1.

The General Counsel concluded that language was not offensive to chill Section 7 collective action rights, because it is commonplace language used by employers not to preclude unionization-type activities but, instead, to defend against an employee claiming the handbook created contract rights. 

In both Advice Memoranda, the NLRB observed that the case of American Red Cross Arizona Blood Services, was resolved by an administrative law judge and did not reach Board review, suggesting the result would have been different if reviewed by the Board.  The Memorandums also distinguished American Red Cross by the provision in that handbook in that case requiring the employee to sign her agreement that she could do nothing to change the at-will status.  However, each Memoranda concludes with the direction for all regions of the NLRB to submit all cases involving handbook provisions to the Division of Advice. 

It appears that the tempest created over the Red Cross decision has subsided, at least temporarily, and employers can take that issue off the front burner.  A review of the at-will provision in your handbook should be considered, however, to ensure that it is consistent with the NLRB’s recent determination just in case . . . .