The NLRB announced on October 31, 2012, that the Office of General Counsel issued advice memoranda regarding "at will" employment policies. Both employed the same analysis. The General Counsel in both cases determined that the employers' at will language did not violate the NLRA.
The first memo (here) addressed the at-will policy in a Mimi's Cafe's handbook, taken from a restaurant in Arizona. The policy language was:
The relationship between you and Mimi's Cafe is referred to as "employment at will." This means that your employment can be terminated at any time for any reason, with or without cause, with or without notice, by you or the Company. No representative of the Company has authority to enter into any agreement contrary to the foregoing "employment at will" relationship. Nothing contained in this handbook creates an express or implied contract of employment.
The second memo (here) addressed the at will disclaimer in the handbook of Rocha Transportation, a Modesto, California employer. The policy at issue read:
Employment with Rocha Transportation is employment at-will. Employment at-will may be terminated with or without cause and with or without notice at any time by the employee or the Company. Nothing in this Handbook or in any document or statement shall limit the right to terminate employment at-will. 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.
The General Counsel analyzed whether the above "bolded" language in the respective handbooks was unlawful under the NLRA. Why? Because the NLRA protects employees rights to organize or engage in concerted activities for their mutual aid and protection. These are called "Section 7 rights." Even neutral policies that infringe on those rights can be held illegal.
The General Counsel analyzed the policies in a similar way. This language is quoted from the Rocha memorandum:
An employer violates Section 8(a)(1) of the Act through the maintenance of a work rule or policy if the rule would "reasonably tend to chill employees in the exercise of their Section 7 rights." The Board has developed a two-step inquiry to determine if a work rule would have such an effect. First, a rule is unlawful if it explicitly restricts Section 7 activities. Second, if the rule does not explicitly restrict protected activities, it will nonetheless be found to violate the Act upon a showing that: (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights . . .
The General Counsel decided the policies did not explicitly restrict Section 7 rights. Neither business issued the policies in response to union activity, and there was no evidence that the policy was applied to restrict Section 7 rights.
That left the issue of whether employees "would reasonably construe" the at will policies to prohibit Section 7 activity. The General Counsel decided this policy language would not:
The provision does not require employees to refrain from seeking to change their at-will status or to agree that their at-will status cannot be changed in any way. Instead, the provision simply prohibits the Employer's own representatives from entering into employment agreements that provide for other than at-will employment.10 Indeed, the provision explicitly permits the Employer's president to enter into written employment agreements that modify the employment at-will relationship, and thus encompasses
the possibility of a potential modification of the at-will relationship through a collective -bargaining agreement that is ratified by the Company president. Accordingly, we conclude that employees would not reasonably construe this provision to restrict their Section 7 right to select a collective -bargaining representative and bargain collectively for a contract.
Here is the General Counsel's analysis of the Mimi's Cafe policy:
We conclude that the contested handbook provision would not reasonably be interpreted to restrict an employee's Section 7 right to engage in concerted attempts to change his or her employment at-will status. First, the provision does not require employees to refrain from seeking to change their at-will status or to agree that their at-will status cannot be changed in any way. Instead, the provision simply highlights the Employer's policy that its own representatives are not authorized to modify an employee's at-will status. Moreover, the clear meaning of the provision at issue is to reinforce the Employer's unambiguously- stated purpose of its at-will policy: it explicitly states 'Jnjothing contained in this handbook creates an express or implied contract of employment." It is commonplace for employers to rely on policy provisions such as those at issue here as a defense against potential tolegal actions by employees asserting that the employee handbook creates an enforceable employment contract.10 Accordingly, we conclude that employees would not reasonably construe this provision to restrict their Section 7 right to select a collective -bargaining representative and bargain collectively for a contract when considered in context.11 The Region should therefore dismiss, absent withdrawal, the Charging Party's allegation that the Employer's employment at-will policy violates Section 8(a)(1).
(footnotes and citations omitted).
You may have read that the NLRB was waging war against at will employment policies. In fact, an administrative law judge previously held that an acknowledgment of employment at will --- "I further agree that the at-will employment relationship cannot be amended, modified or altered in any way." -- was unlawful. However, the General Counsel noted that the parties settled before the Board could review the ALJ's decision. The General Counsel stated the law in this area is "unsettled" and that the NLRB offices should submit all cases for review before proceeding.
So, "at will" gets a bit of a reprieve. It may be wise to have your policy language reviewed for compliance with the NLRA, at least once this area of the law is settled.