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At-Will Employment Disclaimers
On June 26, 2014, the U.S. Supreme Court issued a decision in the Noel Canning case that may impact the validity of several decisions relating to protected concerted activity in the workplace. InNational Labor Relations Board v. Noel Canning, the U.S. Supreme Court held that President Obama’s “recess” appointments to the NLRB were invalid, calling into question any decisions issued by the Board during this time frame.
The NLRB has indicated that it will work to resolve any cases affected by the U.S. Supreme Court’s ruling as expeditiously as possible. In the interim, employers should wait for further information from the NLRB before disregarding any opinions issued while the invalid Board was in place. If you have any questions regarding this decision and how it may impact your workplace, seek advice of counsel.
In a line of cases unfriendly to employers, the NLRB attacked traditional at-will employment disclaimers. In American Red Cross, an NLRB ALJ held that requiring employees to agree in writing that “the at-will employment relationship cannot be amended, modified or altered in any way” was unlawful. The ALJ reasoned that the provision reasonably chilled NLRA Section 7 rights because employees may believe they could not engage in protected concerted activity to modify the at-will relationship.
Shortly after American Red Cross, the Phoenix, Arizona office of the NLRB filed an unfair labor practice complaint against Hyatt alleging, among other allegations, that the provisions in Hyatt’s handbook regarding at-will employment interfered with Section 7 rights, in violation of Section 8(a)(1). The at-will employment provision at issue stated the following: “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 either Hyatt’s Executive Vice-President/Chief Operating Officer or Hyatt’s President.” The Hyatt case was ultimately settled in May 2012 without a decision.
In spite of the NLRB’s apparent hostility towards at-will employment disclaimers in American Red Crossand Hyatt, in December 2012, the Board’s Division of Advice issued two Advice Memoranda that upheld at-will employment disclaimers. In SWH Corporation d/b/a/ Mimi’s Café, the Division of Advice upheld a handbook provision which stated that “[n]o representative of the Company has authority to enter into any agreement contrary to the foregoing ‘employment at will’ relationship.” The Division of Advice reasoned that the provision did not restrict Section 7 rights, but instead merely served to reinforce “the Employer’s unambiguously-stated purpose of its at-will policy.”
Similarly, in Rocha Transportation, the Division of Advice upheld a handbook provision which stated the following: “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 Division of Advice held that this provision did not restrict Section 7 activity, and also did “not require employees to refrain from seeking to change their at-will status or to agree that their at-will status [could not] be changed in any way.”
The Division of Advice distinguished the at-will employment disclaimers at issue in both SWH Corporation and Rocha Transportation from that held unlawful in American Red Cross, discussed above. Unlike the disclaimers at issue in the former two cases, the disclaimer in American Red Crossa mounted to a waiver “of the employee’s right ‘to advocate concertedly ... to change his/her at-will status,” thereby violating an employee’s Section 7 rights.
The NLRB has indicated that it will work to resolve any cases affected by the U.S. Supreme Court’s ruling as expeditiously as possible. In the interim, employers should wait for further information from the NLRB before disregarding any opinions issued while the invalid Board was in place. If you have any questions regarding this decision and how it may impact your workplace, seek advice of counsel.
In a line of cases unfriendly to employers, the NLRB attacked traditional at-will employment disclaimers. In American Red Cross, an NLRB ALJ held that requiring employees to agree in writing that “the at-will employment relationship cannot be amended, modified or altered in any way” was unlawful. The ALJ reasoned that the provision reasonably chilled NLRA Section 7 rights because employees may believe they could not engage in protected concerted activity to modify the at-will relationship.
Shortly after American Red Cross, the Phoenix, Arizona office of the NLRB filed an unfair labor practice complaint against Hyatt alleging, among other allegations, that the provisions in Hyatt’s handbook regarding at-will employment interfered with Section 7 rights, in violation of Section 8(a)(1). The at-will employment provision at issue stated the following: “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 either Hyatt’s Executive Vice-President/Chief Operating Officer or Hyatt’s President.” The Hyatt case was ultimately settled in May 2012 without a decision.
In spite of the NLRB’s apparent hostility towards at-will employment disclaimers in American Red Crossand Hyatt, in December 2012, the Board’s Division of Advice issued two Advice Memoranda that upheld at-will employment disclaimers. In SWH Corporation d/b/a/ Mimi’s Café, the Division of Advice upheld a handbook provision which stated that “[n]o representative of the Company has authority to enter into any agreement contrary to the foregoing ‘employment at will’ relationship.” The Division of Advice reasoned that the provision did not restrict Section 7 rights, but instead merely served to reinforce “the Employer’s unambiguously-stated purpose of its at-will policy.”
Similarly, in Rocha Transportation, the Division of Advice upheld a handbook provision which stated the following: “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 Division of Advice held that this provision did not restrict Section 7 activity, and also did “not require employees to refrain from seeking to change their at-will status or to agree that their at-will status [could not] be changed in any way.”
The Division of Advice distinguished the at-will employment disclaimers at issue in both SWH Corporation and Rocha Transportation from that held unlawful in American Red Cross, discussed above. Unlike the disclaimers at issue in the former two cases, the disclaimer in American Red Crossa mounted to a waiver “of the employee’s right ‘to advocate concertedly ... to change his/her at-will status,” thereby violating an employee’s Section 7 rights.