NLRB attacks “at-will” disclaimers in employee handbooks

Reports have surfaced recently that a National Labor Relations Board office in Phoenix has filed unfair labor practice charges against nonunion employers with overly broad “employment at will” language in their employee handbooks. The local Board office objected to statements that employees’ at-will status couldn’t be modified, or could only be modified if a senior company official signed a written agreement. Such statements could be viewed as prohibiting employees from banding together to form a union and change their at-will status. In one case, an administrative law judge agreed with the Board’s position, requiring the American Red Cross to remove the offending language from its employee handbook, inform employees of the change, and distribute a notice admitting to violating the National Labor Relations Act and promising not to do so in the future. In another case (initiated by the UNITE HERE union), a Board complaint against Hyatt Hotels was resolved by an informal settlement according to the Board’s website.

Tips:  In most states (with significant exceptions in Montana), it’s still OK for nonunion employers to tell employees that their employment is at will (in other words, either the company or the employee may terminate employment at any time, for any reason). What’s problematic is language that tries to prevent changes to at-will status. However, there’s a good reason for saying the at-will relationship can’t be modified except by written agreement with a senior company official. Employers want to protect themselves from situations where a supervisor or manager makes verbal promises of lifetime employment (“as long as you keep doing good work, you’ll always have a job here”). This is one of those situations where as an employer you should weigh competing risks and decide what approach is right for your organization. If your at-will language is found to violate the National Labor Relations Act, the worst that can happen is that you’ll be required to rescind it and publicize the correction. Talk with your Vigilant staff representative to consider your options.

In case you’re wondering why Montana employers are different, there’s a state law called the Montana Wrongful Discharge from Employment Act (WDEA). Once employees pass their probationary period, they can only be fired for cause. There are exceptions for employees covered by written contracts of employment for a specific term, and for employees covered by a collective bargaining agreement.