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NLRB Broadens Challenges to Employers, Probes At-Will Employment

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July 18, 2012

By Doug Hass

As we’ve discussed recently, with its rulemaking largely tied up or defeated in the federal courts, the National Labor Relations Board (NLRB) has recently turned its focus to general employer policies shared by both union and non-union employers.  In addition to opaque guidance on social media policies, and a rejection of a common off-duty access policy, the NLRB recently added to its stream of challenges that extend well beyond labor disputes.  In two recent cases, and in public comments by the General Counsel, the NLRB announced a new challenge directly targeting one of the most common and previously unobjectionable employer policies: at-will employment.

The NLRB’s Attack on At-Will Employment

Social media policies are not the only, or even the most alarming, issue for employers.  Earlier this year, the NLRB’s Phoenix regional office issued a complaint against Hyatt Corporation based on allegedly overbroad provisions in both a social media policy and, most troublingly, an employee handbook acknowledgment.  Specifically, the General Counsel found that three extremely common provisions were overly broad and discriminatory:

  • “I understand my employment is ‘at will.’”
  • “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 Hyatt’s president or executive vice president/COO.
  • “[T]he at-will status of my employment… can only be changed in a writing” signed by the employee and one of the two Hyatt executives.

Just prior to this complaint, a Board ALJ had ruled that the American Red Cross had also violated the NLRA with a similar, albeit broader, at-will acknowledgment.  The ALJ explained the General Counsel’s position that requiring an employee to sign such an acknowledgement was “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.” 

Last month, the General Counsel confirmed this new, broad approach.  Speaking at the Connecticut Bar Association’s annual meeting, Solomon indicated that the NLRB will turn to blanket at-will employment statements as the agency’s next enforcement target.  According to Solomon, if an employee (or, more realistically, if the General Counsel) could reasonably believe that an at-will employment clause means that an employee could not alter his or her at-will status even by seeking union representation and a collective bargaining agreement, then the at-will employment clause could be held to chill the employee’s exercise of his or her Section 7 rights.  This approach is the next logical extension of the Board’s use of a “nip-it-in-the-bud” theory first expressed in its Parexel International decision that we previously highlighted in 2011.  The Parexel decision presaged the NLRB’s elimination of the requirement that employees engage in any “concerted activity” at all.  The new anti-at-will focus and crackdown on social media policies reinforce the NLRB’s expansion of the NLRA to non-union employers and to “activity” that is neither concerted nor traditionally protected under Section 7.  Particularly with its new focus on at-will employment, the NLRB has now reached the most routine parts of every employment relationship.  Non-union employers in particular no longer have the luxury of dismissing the Board and labor law as unimportant.

What does this latest expansion mean for employers?

The NLRB’s recent track record defending its broad expansion of the NLRA is spotty at best.  At some point, an employer will challenge a NLRB ruling that deems a particular standard employment policy or at-will acknowledgment “unlawful,” which will hopefully provide some useful guidance to employers and employees about the scope of these policies.  Until then, left with no real guidance, employers can only continue to draft policies that attempt to educate employees and prevent unwanted conduct.  As with all workplace policies, employers should tailor their policies and at-will employment notices to their particular business interests and tie them to other, existing workplace policies.  The NLRB’s aggressive enforcement represents another, more nuanced layer of risk to employment-related decisions, and one that is not strictly limited to unionized workplaces. 

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