This year on Halloween, the National Labor Relations Board’s (NLRB) Acting General Counsel had a treat in store for employers. On October 31, the Acting General Counsel issued advice memoranda finding valid two employee handbook at-will disclaimers.
Just last summer, the Acting General Counsel filed a complaint alleging an employer engaged in an unfair labor practice by promulgating a handbook with a disclaimer stating, in part: “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.”
And, 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: “I further agree that the at-will relationship cannot be amended, modified or altered in any way” (NLRB v, American Red Cross, Case 28-A-23443).
The problem with these disclaimers? According to the Acting General Counsel and the ALJ, they could be interpreted by employees to mean that organizational activities would be futile and that they could not alter their at-will status through unionization. Therefore, they violated employees’ Section 7 rights to engage in concerted activities and to join a union. (Read NLRB targets employee handbooks.)
These actions caused some confusion and consternation among employers who have been advised for years to include a disclaimer in employee handbooks. So, it is with some relief that the Acting General Counsel has found in two instances that handbook at-will disclaimers were not overly broad and did not interfere with employees’ Section 7 rights.
In one case, the relevant portion of the handbook disclaimer stated: “No representative of the Company has authority to enter into any agreement contrary to the forgoing “employment at will” relationship.” The General Counsel concluded that the disclaimer language could not reasonably be interpreted to restrict Section 7 activity. It did not prohibit employees from trying to change their at-will status, or require them to agree that the at-will relationship could not be changed in any way.
Significantly for employers worried about the extent that the NLRB has scrutinized policies and practices in non-unionized workplaces, the General Counsel also recognized that it “is commonplace for employers to rely on policy provisions such as those at issue here” to avoid creating contractual obligations to employees beyond those in an at-will relationship (SWH Corporation d/b/a Mimi’s Café, Advice Memorandum, Case 28-CA-084365 (Oct. 31, 2012)).
In the second case, the General Counsel similarly found the employees could not reasonably construe the following handbook disclaimer as a restriction on Section 7 rights: “No manager, supervisor, or employee of [the Employer] has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will. Only the president of the Company has the authority to make any such agreement and then only in writing.”
The General Counsel here reasoned that the “potentially violative phrases” must be read in context. He concluded that the provision quoted above prohibited the employer’s representatives from entering into employment agreements, but allowed the employer’s president to enter into agreements modifying the at-will relationship, including potentially a collective bargaining agreement (Rocha Transportation, Advice Memorandum, Case 32-CA-086799).
In both memos, the General Counsel noted that the parties in American Red Cross settled their case before the NLRB had a chance to review it. He cautioned that “the law in this area remains unsettled.”
At least for now, however, it seems that contract disclaimers may still be included in employee handbooks, and employers do not have to choose whether to risk an unfair labor practice charge or a breach of contract claim. Employers should remain alert for future actions by the NLRB in this area—like Halloween sweets, this treat may not last long.
Patricia M. Trainor, JD, SPHR is Senior 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, before the EEOC, and 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. She has a Masters Degree in Mass Communication from San Diego State University. 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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