California Labor &
Employment Law Blog
Nov 1, 2012

NLRB Issues Some Positive Guidance on At-Will Employment Policies

Topics: Personnel Policies and Procedures, Union-Management Relations

Yesterday, the NLRB’s Acting General Counsel issued advice memos analyzing whether two employers’ at-will policies violated employees’ Section 7 rights under the NLRA.  In both instances, the AGC found that the at-will policies did not violate the NLRA.  These findings are in contrast to a decision earlier this year by a NLRB administrative law judge finding that a fairly standard at-will employment policy maintained by American Red Cross Arizona violated Section 7.  So how do employers reconcile this, and do at-will employment policies really run afoul of Section 7 rights?  Yesterday’s newly issued advice memos shed a little more guidance on the issue. 

In the first case, involving Rocha Transportation, the employer’s at-will policy provided that employment is at-will, that nothing in the handbook should be interpreted to limit the right to terminate the employment relationship at-will, and that only the president of the company has the authority to enter into an agreement for something other than at-will employment.  An employee challenged this policy as a violation of the NLRA, arguing that the policy was overbroad and reasonably operated to “chill” employees’ exercise of Section 7 rights to engage in concerted activity to organize and try to achieve something other than at-will employment.

In the second case, involving Mimi’s Café, the at-will employment policy contained similar language but stated that “no representative of the company” has authority to enter into any agreement altering the at-will employment relationship.  As was the case with Rocha Transportation, a Mimi’s employee charged that Mimi’s policy was overbroad and would reasonably chill employees’ Section 7 right to select union representation and engage in collective bargaining.

The AGC rejected both employees’ contentions and found that the at-will policies did not violate the NLRA.  The AGC reasoned that the policies do not expressly restrict Section 7 activity and there was no evidence that the policies were promulgated in response to such activity or in an effort to restrict such activity.  The AGC further found that employees would not reasonably interpret the policies as restricting Section 7 rights.  The AGC reasoned that nothing in the policies required the employees to agree that they could not seek to change their at-will employment status, nor did the policies state that at-will employment could never be changed.  Instead, the policies simply operated to prevent the employers’ representatives from entering into agreements providing for something other than at-will employment.

So what about the earlier American Red Cross case?  In that case, the employer’s at-will policy was set forth in a written acknowledgement form that employees had to sign and which stated:  “I agree that the at-will employment relationship cannot be amended, modified or altered in any way.”  The ALJ in that case held that the policy would reasonably chill employees interested in exercising Section 7 rights to select a union and engage in collective bargaining that might “amend, modify or alter” the at-will nature of the employment relationship.  As such, the ALJ found that the policy violated the NLRA. 

In yesterday’s advice memos, the AGC did not expressly disagree with the ALJ’s conclusion in the American Red Cross case (though the AGC carefully noted that the American Red Cross matter settled before Board review, somewhat de-valuing the ALJ’s opinion).  Instead, the AGC distinguished the American Red Cross case by highlighting the fact that the at-will policy in that case expressly stated that at-will employment could never be altered (implicity, including through union representation), whereas the policies before the AGC did not contain that broad of a statement; they simply restricted the authority of the employers’ representatives from entering into private agreements for something other than at-will employment.

Employers may wish to review and revise their at-will employment policies in light of the NLRB’s guidance and the fact that the NLRB appears intent on continuing to attack and invalidate neutral employment policies that really have nothing to do with union rights or the right to engage in concerted activity.  All of the decisions referenced in this post are available in full on the NLRB’s website.

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Robin Largent has a regular presence in California state and federal courts and has been lead defense counsel and appellate counsel for large and small California employers in litigation (and arbitration) ranging from individual discrimination and harassment claims to complex wage and hour representative and class actions. She also leads the firm’s appellate practice, having substantial experience and success handling appeals, writ petitions, and amicus briefs in both state and federal court on issues such as class certification (particularly in the wage and hour arena), manageability and due process concerns associated with class action trials, exempt/non-exempt misclassification issues, meal and rest break compliance, trade secret/unfair competition matters, and the scope of federal court jurisdiction under the Class Action Fairness Act.
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