• NLRB Acting General Counsel Sheds Light on Lawful "At-Will" Clauses
  • November 7, 2012 | Author: Stuart R. Buttrick
  • Law Firm: Faegre Baker Daniels - Indianapolis Office
  • The Acting General Counsel (AGC) of the National Labor Relations Board (NLRB) issued two reports on October 31, 2012, providing guidelines for what the AGC believes are lawful "at-will" employment clauses. Based on these recent reports reviewing employment at-will clauses from two companies, Rocha Transportation and Mimi's Café, the AGC takes the position that at-will clauses are lawful when the employer limits the company representatives with the authority to change employees' at-will relationship, but does not require employees to agree that the employment relationship cannot be changed.

    Employers' at-will clauses have recently been challenged as violating Section 8 (a)(1) of the National Labor Relations Act (NLRA). Section 7 of the Act provides that all workers - and not just workers in labor unions - may engage in "concerted activities for the purpose of collective bargaining or other mutual aid or protection." Generally, two or more employees acting together to address a collective employee concern about terms and conditions of employment is considered protected concerted activity. An employer violates Section 8 (a)(1) of the Act by maintaining a work rule or policy that would "chill" employees in their exercise of their Section 7 rights.

    The question of whether employment at-will clauses violate the NLRA has been garnering attention since earlier this year when an NLRB administrative law judge found an American Red Cross unit's at-will relationship disclaimer to be unlawfully broad. The American Red Cross' at-will clause required the employees to agree "that the at-will employment relationship cannot be amended, modified or altered in any way." The administrative law judge found that the signing of this acknowledgment form was a waiver of the employees' right to organize.

    In contrast, the at-will employment clauses reviewed in the AGC's most recent reports did not expressly bar employees' at-will relationship from being altered. The Rocha Transportation clause prohibited a "manager, supervisor or employee" from entering into an employment agreement with an employee for an arrangement other than at-will. Similarly, Mimi's Café's at-will clause barred any "company representative" from entering into any employment agreement with an employee other than at-will. The AGC stated that neither of these clauses contained overly broad language that could damper employees' exercise of their Section 7 rights because these clauses did not stop the employees from seeking to change their at-will status. Instead, the clauses only limited the individuals who, on behalf of the employer, had the authority to change employees' at-will status.

    The distinction between the lawful and unlawful at-will clauses is a fine one. However, the reports issued by the AGC give employers clarity as to what language should be incorporated so that their clauses are not viewed as overly broad.