Employers often include employment at-will disclaimers in their handbook and employment application to protect against lawsuits by employees claiming that they have a contract for something other than at-will employment.  But earlier this year, the NLRB began cracking down on at-will policies, claiming that they can cause employees to believe that they have waived their ability to join a union or to advocate by other means to change their at-will status. 

Now the NLRB appears to have shifted course. In two Advice Memoranda issued on October 31, 2012 (found here and here), the NLRB’s Division of Advice recommended dismissal of two unfair labor practice cases that had challenged at-will policies. This guidance affirms that at-will policies can be permissible, provided they are narrowly tailored to avoid interference with employees’ NLRA rights. 

At-will policies first were drawn into the spotlight earlier this year in American Red Cross Arizona Blood Services Region, 28-CA-23443.  In that case, the employer required employees to sign a verification stating, “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.”  The NLRB judge invalidated the policy, finding that it was “essentially a waiver” of the employees’ rights, under §7 of the NLRA, to advocate concertedly to change their at-will status. 

The spotlight intensified when an NLRB regional office issued a complaint with similar allegations about another employer’s at-will policy. In that case, Hyatt Hotels Corp., 28-CA-061114, the employer had required employees to sign a policy that stated, “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 settled before a decision was handed down. But the increased scrutiny left many employers wondering if their at-will policies were also in danger. 

Thankfully the Advice Memoranda issued Wednesday offer some much needed guidance on what the NLRB will look for when it evaluates these policies.  According to the Memos, which evaluated two at-will policies and found that they did not violate the NLRA, a valid at-will policy: (1) does not require employees to refrain from seeking to change their at-will status, or to agree that their status cannot be changed in any way; (2) is not drafted in response to union or other protected activity; and (3) has an unambiguously clear purpose that does not violate the NLRA, such as to defend against potential legal actions that assert that the handbook is an enforceable employment contract. 

Applying these guidelines, the Memos addressed, and approved, two employer policies. The first policy stated that “only the president” can modify the employees’ at-will status. The NLRB said this was permissible because it “encompasses the possibility of a potential modification of the at-will relationship.” 

The second policy stated that “[n]o representative of the Company has authority to enter into any agreement contrary to the…employment at will’ relationship [and nothing] contained in this handbook creates an express or implied contract of employment.” The NLRB said that this was permissible because: (i) it did not require employees to refrain from seeking to change their at-will status; and (ii) it was clearly intended to insulate the employer against legal actions asserting that the handbook created an enforceable employment contract, as evidenced by the explicit language about express or implied contracts of employment. 

The NLRB’s Advice Memos on at-will employment provide needed guidance on a topic that has generated major concern for employers. While this does not mean that the NLRB will now permit all at-will policies, it does signal that the NLRB will permit those that are narrowly tailored to avoid interference with employees’ NLRA rights.