CLIENT ALERT - Overly Broad "At-Will" Employment Disclaimers: The National Labor Relations Board's Latest Target
September 10, 2012

The National Labor Relations Board has been paying a great deal of attention to any type of employer activity that may conceivably have an effect on employee collective bargaining rights. The latest target for the National Labor Relations Board (“NLRB”) - the federal administrative agency responsible for enforcing the National Labor Relations Act (“the Act”) - has been statements about the “at-will” nature of employment set forth in employee handbooks and other employment documents. The NLRB contends that such statements may have a chilling effect on an employee’s right to attempt to alter the terms of employment through protected concerted activity or collective bargaining.

Employment-at-will disclaimers and acknowledgements are commonly incorporated into employee handbooks. Similar statements are often included in offer letters and applications for employment. In an effort to protect against claims of implied employment contracts based on provisions incorporated into these documents, it is common for employers to include a statement in their employment documents that define the nature of the employment relationship. An employment-at-will statement usually informs the employee that his or her employment is “at will” and, as such, can be terminated by either the employee or employer at any time, for any reason. Employee handbooks often go a step further to state that the “at-will” status of the employee cannot be changed unless there is a written agreement signed by both the employee and a high-ranking management official of the employer.

Two Recent Cases Challenging “At-Will” Disclaimers

These are the types of “at-will” employment statements that have drawn the attention of the NLRB. In two recent cases, the NLRB’s Acting General Counsel has claimed that allegedly overly broad “employment-at-will” disclaimers in employee handbooks and other employer documents have the effect of interfering with employees’ rights to engage in protected concerted activity.

In the first case, employees were required to sign a form acknowledging that they received a copy of the employee handbook, which provided that the at-will employment relationship could only be changed through a written agreement signed by the employee and the employer’s executive vice president or chief operating officer. The NLRB alleged that these statements were overbroad and violated the act by chilling an employee’s right to work in concert with other employees to change the nature of the employment relationship through protected activities. The matter settled without a determination of these issues. Therefore, there is no indication as to whether the statements would have been found to have interfered with employees’ rights under the Act or, if it in fact did, how the language might be modified to comply with the Act’s requirements.

In another recent case, it was determined that an employer violated the Act by maintaining an overly broad employment at-will disclaimer in its employer handbook. The policy at issue contained the following statement: “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” It was argued that this language would cause employees to conclude that the at-will language means that their at-will status cannot be changed through collective bargaining. The Judge agreed and determined that requiring employees to acknowledge the employment-at-will policy expressly restricted employees’ rights to engage in protected concerted activities. This is because the provision suggests that employees cannot act together to attempt to change the terms and conditions of their employment.

Unfortunately, neither of these cases provide any definitive guidance on the issue and do not address the issue of how such statements can be revised to satisfy the NLRB’s concerns. What is clear is that the NLRB will be looking closely at employers’ at-will disclaimers. It is certain that there will be further cases scrutinizing these at-will employment disclaimers.

Recommendations to Employers

In light of these recent decisions, we recommend that you review and reconsider your company’s employment-at-will disclaimers in employee handbooks, offer letters, applications for employment and any other company documents to determine whether the disclaimer contains language that may be overly broad. It would be wise to revise any questionable language to make sure the statement does not suggest that at-will employment cannot be changed under any circumstances. Otherwise, you may draw the attention of the NLRB.