The presumption in nearly every state is that employees of private employers in those states are "at-will" employees. Of course, there are many court-created and statutory exceptions to at-will employment. Indeed, some have observed that the exceptions to the at-will doctrine have swallowed the rule. Recently, the National Labor Relations Board ("NLRB" or "Board") joined the fray and has started an assault on one common employer practice aimed at preserving employees' at-will status - requiring employees to acknowledge that they are at-will employees and that their at-will status can only be changed under very narrow circumstances. These acknowledgements deter some wrongful discharge lawsuits and are valuable evidence in such cases. (See "Sherman & Howard Successes," third item, below.) The NLRB's Acting General Counsel, and at least one Regional Director, have placed in their "cross-hairs" employee handbook provisions reciting employees' at-will status. Specifically, Board agents are asserting that some at-will provisions commonly seen in employee handbooks interfere with employee rights protected by Section 7 of the National Labor Relations Act ("the Act"), including the rights to engage in concerted activity and to seek union representation.
Two unfair labor practice cases, both from Region 28, headquartered in Phoenix, best illustrate the Board's focus - American Red Cross Arizona, Blood Services Region and Lois Hampton;* and Hyatt Hotels Corp.** Also revealing are recent comments by the Board's Acting General Counsel, Lafe Solomon, which are discussed below.
In Red Cross, the Charging Party, Ms. Hampton, had complained about her supervisor frequently and had been a "ring-leader" in marshaling other complaints from co-workers. During these activities, she was presented with an employee handbook that had an "authorization" form for her to sign. That form defined an "at-will" employment relationship and included the following acknowledgment, "I further agree that the at-will employment relationship cannot be amended, modified or altered in any way." Ms. Hampton refused to sign the form, saying she did not agree with some of the at-will language. She was allowed to cross-out language on the form, and she signed the redacted copy. The relationship between Ms. Hampton and her supervisor continued to sour and she was eventually discharged for reasons that the employer contended were performance-based.
Ms. Hampton filed an unfair labor practice charge with the NLRB, alleging that she was fired because of her engaging in protected, concerted activity under the Act. The Regional Director in Phoenix issued a complaint against Red Cross alleging that it had violated the Act both in terminating Ms. Hampton's employment, and in promulgating an "at-will" policy that interfered with employees' rights to engage in concerted activity. The case went to a hearing before an Administrative Law Judge ("ALJ"), who upheld the Regional Director's position and found Red Cross guilty of unfair labor practices.
The bulk of the ALJ's decision was devoted to issues other than the employee handbook and the at-will acknowledgement. Nevertheless, the ALJ considered the handbook language, quoted above, and agreed with the General Counsel that employees could "reasonably construe the language to prohibit Section 7 activity." Specifically, the ALJ held that the signing of the acknowledgment form "is essentially a waiver in which an employee agrees that his/her at-will status cannot change, thereby relinquishing his/her right to advocate concertedly, whether represented by a union or not, to change his/her at-will status." (Emphasis added.) Although the employer had changed the challenged language before the hearing, the ALJ ruled that the move did not cure the problem because employees were not given any assurances that their Section 7 rights would not be interfered with in the future.
The Red Cross did not appeal the ALJ's decision. Rather, the parties jointly moved to remand the case to the Regional Director to enter a compliance agreement. Therefore, there will be neither Board nor court review of this decision.
The Hyatt Hotels case did not even make it to a hearing. Rather, after the Regional Director issued and served the complaint, and before a hearing could be held, the employer opted to settle. In Hyatt Hotels, the Regional Director alleged that the following acknowledgement violated employees' rights under Section 7 of the Act:
I understand my employment is "at-will" . . . . 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 President/Chief Operating Officer or Hyatt's President.
Again, the Regional Director's theory was that the cited language chilled employees' Section 7 rights to engage in concerted activity and to self-organize. The settlement of the case, as indicated above, has terminated the proceedings.
Earlier this summer, the Acting General Counsel underscored these efforts by Region 28 during an appearance before the Connecticut Bar Association. He is reported to have commented that an employer's mere promulgation of an at-will statement might violate the Act, because it would at least lead employees to believe that it would be futile for them to try organizing.
It is not possible to discern the Board's precise aim. Nevertheless, we should be mindful that the Board's proposed "posting" regulation, which would have required employers to post in the workplace a summary of employees' Section 7 rights, was blocked by a federal appeals court. It is possible that the Board is seeking to pressure non-union employers (read "at-will" employers) who choose to promulgate an at-will policy, to moderate that policy by also indicating that nothing in that policy affects employees' rights under the Act, and/or by enumerating employees' Section 7 rights.
While the future is unclear, there will be years of Board and court review before Region 28's view will become the national "law" under the Act. Until that time, employers should review their at-will policies, consider the risks they present, and seek advice about whether the policies should be moderated as the law develops.
*American Red Cross Arizona, Blood Services Region and Lois Hampton, 28-CA-23443, 2012 WL 311334 (NLRB Feb. 1, 2012)
**Hyatt Hotels Corp., 28-CA-061114 (2012)