The National Labor Relations Board (NLRB), which acts as a quasi-judicial body in deciding cases in administrative proceedings for both unionized and non-unionized employees, recently issued a memo discussing at-will employment policies. The NLRB held that at-will employment clauses in two employee handbooks did not violate the National Labor Relations Act (NLRA). Earlier in the year, the NLRB held that an at-will agreement would violate labor law if it prevented an employee from participating in concerted behavior questioning the employee's at-will status.
At-will employment is an employer/employee relationship under which either party may terminate the relationship at any time without liability. The employer can terminate the employee's employment for any reason, at any time, and the employee can quit working for any reason, at any time. The NLRA provides that employees have the right to organize, form or join labor organizations and to engage in activities for the purpose of collective bargaining or employment protection. This is referred to as "concerted activity."
The recent NLRB memorandum addresses the at-will employment policy of a California trucking company and an Arizona restaurant. The NLRB held that the policies did not violate the employees' rights under the NLRA. The policies were broad and when read alone, employees might think that they could not engage in concerted activity. However, other clauses in the handbook intimated that the at-will relationship could be changed, so employees should not reasonably assume that their NLRA rights were stifled.
The trucking company handbook included a provision stating that no manager, supervisor or employee had authority to make an agreement for employment other than at-will. It went on to say that the president of the company could make such an agreement. The restaurant handbook included language stating that no representative of the company had authority to enter into an agreement contrary to the at-will employment relationship. The NLRB said that the manner in which the handbook language was drafted highlighted the employee's policy, but did not restrict concerted activity.
The law on at-will employment disclaimers in employee handbooks remains unsettled. Employers should consider NLRB rulings when drafting handbook language describing the at-will employment relationship.