The “at-will” employment concept allows employers to terminate an employee for any reason, or no reason at all, so long as the termination does not violate state or federal public policies or anti-discrimination laws. To avoid arguments by “at will” employees that their status changed after they were hired, employee handbooks commonly contain language stating that the employees’ “at-will” status can only be changed by a separate written agreement. The National Labor Relations Board (NLRB) is now scrutinizing such provisions and pursuing administrative claims based on the concept that such provisions may violate the National Labor Relations Act (NLRA).
In February 2012, an NLRB Administrative Law Judge (ALJ) held that the Arizona American Red Cross was in violation of Section 8(a)(1) of the NLRA because its handbook required employees to acknowledge: “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” The ALJ concluded that this provision was too broad and could violate the employees’ right to collectively bargain and potentially change their at-will status. Bolstered by this ruling, the NLRB later filed a similar charge against Hyatt Hotels, asserting that its handbook was illegal because it stated that employees’ “at-will” status could be changed only by a separate written agreement. The NLRB’s Acting General Counsel recently announced that the Board may further expand its nationwide efforts to pursue administrative claims against employers whose handbooks include such provisions, arguing that such provisions can chill employees’ rights to potentially negotiate or attempt to change their at-will status.
The ALJ’s approach to this issue might suggest a need for minor modifications in the phrasing of employers’ handbooks or policies; however, the NLRB’s opposition to policies stating that an employee’s at-will status can be changed only by a separate written agreement may present far greater problems to employers. Such policies were at least partially intended to avoid employee misunderstandings or prevent claims that binding oral promises of continued employment were made by unauthorized lower-level supervisors. Nevertheless, reviewing and updating existing policies may help employers avoid the expense associated with defending against an NLRB unfair labor practice charge or a civil lawsuit by a terminated employee maintaining that such provisions were contrary to law or public policy and therefore unenforceable.