By George J. Miller
One of the most common parts of employers’ employee handbooks is a page which the employee signs acknowledging receipt of the handbook. These pages often contain statements to the effect that the employee acknowledges or agrees that the handbook is not a contract of employment and that the employment relationship is “at-will.” However, recent developments at the National Labor Relations Board call into question the legality of such provisions under the National Labor Relations Act (“Act”), at least if they are not worded very carefully.
In a case decided by an administrative law judge in February of this year involving a major blood bank, the company’s “Agreement and Acknowledgement Receipt of Employee Handbook” form said in part, “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” While the judge stopped short of ruling that this language expressly prohibited activity protected by Section 7 of the Act, he nevertheless ruled that it violated the Act because employees could reasonably construe it to prohibit Section 7 activity. The judge agreed with the Counsel for the Acting General Counsel of the NLRB who prosecuted the case, that:
“. . . the signing of the acknowledgement 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. For all practical purposes, the clause in question premises employment on an employee’s agreement not to enter into any contract, to make any efforts, or to engage in conduct that could result in union representation and in a collective-bargaining agreement, which would amend, modify or alter the at-will relationship. Clearly such a clause would reasonably chill employees who were interested in exercising their Section 7 rights.”
As a remedy, the judge ordered the employer to cease and desist from maintaining or enforcing the acknowledgement form containing the language in question.
Decisions of NLRB administrative law judges do not have the force of law unless and until adopted by the NLRB and enforced by a federal court of appeals. According to the case information on the NLRB’s website, the parties in this case settled after the judge’s decision. So the judge’s decision in this case will not become law. However, it reflects the position of the office of the Acting General Counsel of the NLRB, which prosecuted the case and prosecutes all unfair labor practice cases. It has been reported that more recently the Acting General Counsel issued a similar complaint against Hyatt Hotels, and that case was quickly settled. Thus, it appears that in keeping with the now well known attack on employer’s social media policies, the Acting General Counsel will also be scrutinizing at-will policies. In order to avoid litigation at the NLRB, employers whose employee handbooks or other policies or forms (e.g., application forms) contain at-will provisions should consult with their legal counsel to determine whether or not those provisions can or should be modified to avoid an allegation that they violate the Act.