Another shot across the bow: NLRB challenges ‘at-will’ statements

by Jeff Hurt

Nonunion employers must be scratching their collective heads over the recent shelling they’ve been getting as the National Labor Relations Board (NLRB) seeks to make union organizing easier: proposed labor law posting requirements, “quickie” election rules, and strict limitations on employer social media policies. While some of those initiatives are on hold, the NLRB continues to extend the reach of the National Labor Relations Act (NLRA) into the nonunionized workplace. The Board’s acting general counsel, Lafe Solomon, recently announced that his office will challenge the legality of at-will statements in employment handbooks under the NLRA.

The ammunition
Section 7 of the NLRA guarantees employees “the right to self- organization, to form, join, or assist labor organizations . . . and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” Section 8 of the Act makes it an unfair labor practice for an employer, unionized or nonunionized, to discharge or otherwise take adverse action against an employee for working in concert with other employees to improve their working conditions. The scope of what constitutes “concerted activity” has always been broad and continues to get broader.

Protecting concerted activity is a high priority of the current NLRB. On June 18, the Board launched a webpage describing cases in which nonunionized employers were found to have violated employees’ Section 7 rights (www.nlrb.gov/concerted-activity). The general counsel argues that many at-will statements are impermissibly overly broad and that the common practice of requiring employees to sign acknowledgments of their at-will status is illegal because it interferes with employees’ rights to engage in protected concerted activity or chills (dissuades) them in the exercise of their rights. That argument has found some recent success.

50 Employment Laws in 50 States, including at-will employment

American Red Cross sinks
In a recent unfair labor practice complaint filed with the Board’s regional office in Arizona, an administrative law judge (ALJ) struck down a handbook acknowledgment statement that an employee’s at-will status couldn’t be changed except by an agreement signed by a company official. The statement was found to be an impermissible waiver of the employee’s Section 7 right to change her at-will status (that is, to improve wages, hours, or working conditions) through collective or concerted action with other employees.

The ALJ ordered the employer to reinstate with back pay the employee who was fired for refusing to sign the acknowledgment, revise or rescind the overly broad and discriminatory language in the acknowledgment, and notify all employees of the rescission in writing. The employer didn’t appeal the order. American Red Cross Arizona Blood Services Region, Case No. 28-CA-23443 (Feb. 1, 2012).

Hyatt abandons ship
This summer, Hyatt Hotels settled a similar case in which the Arizona regional director challenged a number of its policies, including the following at-will-employment acknowledgment language, which was alleged to unlawfully interfere with employees’ Section 7 rights:

• 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 Vice President, Chief Operating Officer or Hyatt’s President.
• The sole exception [to Hyatt’s right to change the handbook and other policies] . . . is the at-will status of my employment[,] which can only be changed in a writing signed by me and [the Executive Vice President or President].

As part of the settlement, Hyatt agreed to change its at-will acknowledgment nationwide. It also rescinded all existing acknowledgments and had to post notices to that effect at all of its locations. In the Matter of Hyatt Hotels Corporation, Case No. 28-CA0061114 (Feb. 29, 2012).

Employment Practices Self-Audit Workbook

Is there a safe harbor?
Most nonunionized employers have at-will acknowledgments with language that is very similar to the acknowledgments described in these cases. Should you rescind or modify them? Not yet. Neither the NLRB itself nor any federal court has yet ruled on the validity of the general counsel’s position, so there is no controlling precedent.

However, recent prounionization statements made by NLRB Chairman Mark Pearce and the Board’s recent activity in the nonunionized workplace suggest that the current NLRB might have sided with the general counsel if the Arizona cases had gotten that far. The current Board likely will continue to use the NLRA to extend its reach into nonunion workplaces. While the Arizona cases involved particular at-will policy statements and acknowledgments, we wonder whether the general counsel’s next salvo may be that all blanket at-will-employment handbook statements are illegal.

Making wholesale changes to at-will policies and acknowledgments now is premature. But nonunionized employers need to understand the direction the current NLRB is headed and be prepared. Consider having experienced labor counsel review your at-will policies and acknowledgments in anticipation that the full Board or a court may side with the general counsel. Appropriate policy changes could put your ship out of range of the NLRB’s big guns.

Jeff Hurt is a labor and employment lawyer with Foulston Siefkin LLP in Overland Park, Kansas. In addition to being an attorney, Hurt is a certified SPHR and has more than 20 years experience in a broad range of employment, traditional labor and human resource related matters. You can reach him at 913-253-2165 or jhurt@foulston.com.