August 01, 2012
NLRB targets employee handbooks
By Patricia Trainor, JD, SPHR, Vice President of HR and Compensation Markets

As an employer or HR manager, this employee handbook provision likely sounds very familiar to you:

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“I understand my employment is “at-will.” This means I am free to separate may employment at any time, for any reason, and [Employer] has these same rights. Nothing in this handbook is intended to change my at-will employment status. 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 [Employer’s] Vice President/Chief Operating Officer or [Employer’s] President.”

For years, employers have been advised to include a prominent disclaimer, such as the one above, in their employee handbooks to make clear that the policies and procedures in the handbook do not create a contract for employment beyond the at-will relationship. They have also been advised to require employees to sign an acknowledgement of receipt of the handbook and disclaimer to protect themselves against claims that the employee did not receive or understand the disclaimer.

Now comes news that handbook disclaimers may constitute an unfair labor practice by deterring employees from exercising their rights to engage in concerted activities regarding the terms and conditions of employment and to join a union. These rights are granted to private employees in Section 7 of the National Labor Relations Act (NLRA). Section 8 of the NLRA prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights.

Your response to this may be like mine: “Are you kidding?” Unfortunately, no joking here. The National Labor Relations Board’s (NLRB) Acting General Counsel, Lafe Solomon, filed a complaint against Hyatt Hotels in Phoenix, Arizona, stating that the disclaimer quoted above violates Section 8 of the NLRA (NLRB v. Hyatt Hotel Corp., Case 28-CA-061114). There is no written opinion analyzing whether the complaint had merit in this regard, because it settled after Hyatt agreed to post notices at its hotels stating that it would no longer maintain the “overly broad acknowledgement forms.”

In another case, an administrative law judge (ALJ) ruled that an employer engaged in an unfair labor practice when it included the following language in its employee handbook as part of the at-will employment: “I further agree that the at-will relationship cannot be amended, modified or altered in any way.” The ALJ made its ruling, even though the employer permitted the employee to delete this language before signing the acknowledgement and subsequently modified the handbook at-will provision for all employees (NLRB v, American Red Cross, Case 28-A-23443).

In an address to the Connecticut Bar Association in June 2012, Solomon explained that broad at-will disclaimers may violate the NLRA if they lead employees to believe that organizational activities would be futile (See NLRB Acting General Counsel Addresses At-Will Disclaimers and More at CBA Annual Meeting, by Rita Trivedi, J.D.). Thus, the rationale for the Solomon’s stance is that broad at-will disclaimers may lead employees to conclude that they cannot change their employment status through unionization.

What should employers do? The most prudent course of action at this point is to make sure that employee handbook at-will disclaimers expressly state that they do not affect employees’ right alter their at-will status through a collective bargaining agreement. Beyond that, employers should be alert to future NLRB activity in this regard; in the end, it may be the courts that decide whether the long-standing at-will disclaimer violates the NLRA.

Patricia M. Trainor, J.D., SPHR is Managing Editor of BLR’s human resources and employment law publications. Ms. Trainor has several years of experience representing employers and school districts in labor and employment matters. As an associate at Franczek Sullivan, P.C. in Chicago, she represented employers in state and federal court and before the Illinois Human Rights Commission. Before entering private practice, Ms. Trainor clerked for the Honorable Anthony Scariano at the Illinois Appellate Court. Ms. Trainor received her law degree magna cum laude from Loyola University Law School of Chicago. She has a Masters Degree in Mass Communication from San Diego State University. Additionally, Ms. Trainor is certified as a Senior Professional in Human Resources (SPHR) by the national Human Resources Certification Institute. She is a member of the American Bar Association, the Connecticut Bar Association, and the Illinois Bar Association, and she is admitted to practice in Connecticut and Illinois.

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