Just when employers were thinking they might have to throw out their at-will disclaimers, the National Labor Relations Board Acting General Counsel released an analysis of two at-will employment clauses (Mimi’s Café, Case Number 28-CA-0844365 and Rocha Transportation, Case No. 32-CA-086799), and in finding both lawful under the National Labor Relations Act ("NLRA"), gave employers a Halloween treat!

The first at-will disclaimer analyzed was contained in Mimi’s Café’s handbook (a company acquired by Bob Evans Farms, Inc. in 2004), that provided:

The relationship between you and Mimi’s Café is referred to as "employment at will." This means that your employment can be terminated at any time for any reason, with or without cause, with or without notice, by you or the Company. No representative of the Company has authority to enter into any agreement contrary to the foregoing "employment at will" relationship. Nothing contained in this handbook creates an express or implied contract of employment.

The second challenged at-will provision was in Rocha Transportation’s Handbook that provided:

Statement of At-Will Employment Status
Employment with Rocha Transportation is employment at-will. Employment at-will may be terminated with or without cause and with or without notice at any time by the employee or the Company. Nothing in this Handbook or in any document or statement shall limit the right to terminate employment at-will. No manager, supervisor, or employee of Rocha Transportation has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will. Only the president of the Company has the authority to make any such agreement and then only in writing.

This Handbook also contained an "Acknowledgment of Receipt" employees were required to sign that noted "nothing in the employee handbook creates or is intended to create a promise, contract, or representation of continued employment …"

The bolded provisions were challenged as violating Section (a)(1) of the NLRA because they were allegedly overly broad and would reasonably chill employees from exercising their Section 7 rights to select union representation and engage in collective bargaining.

Using essentially the same analysis to analyze both provisions, the General Counsel concluded that the contested provisions could not reasonably be interpreted to restrict an employee’s Section 7 right to engage in concerted attempts to change his or her employment-at-will status because they did not require employees to refrain from seeking to change their at-will status or agree that their at-will status could not be changed in any way. Rather, they merely provided that the company’s agents were not authorized to modify an employee’s at-will status.

With respect to the Mimi’s Café provision, the General Counsel focused on the last sentence, "[n]othing contained in this handbook creates an express or implied contract of employment," to conclude that the purpose of the at-will policy was to defend against potential legal actions by employees asserting that the handbook created an enforceable contract of employment, rather than violate an employee’s Section 7 rights.

As for Rocha Transportation’s policy, the General Counsel concluded that the challenged provision expressly permitted an employee’s at-will status to be modified, even if it could only be done by the Company’s president. This "possibility of a potential modification of the at-will relationship through a collective-bargaining agreement" ratified the Company president was sufficient to save the policy from being struck down.

With this, the General Counsel recommended The Region dismiss its challenges after concluding that no reasonable employee would construe either provision to restrict their Section 7 right to select a collective-bargaining representative and bargain collectively for a contract when considered in context.

The General Counsel distinguished both conclusions from the Red Cross Arizona Blood Services Region decision in which an Administrative Law Judge ("ALJ") found that the employer violated Section 8(a)(1) by maintaining the following language in an at-will employment acknowledgment: "I further agree that the at-will employment relationship cannot be amended, modified or altered in any way." In that decision, it was the use of the word "I", whereby the employees specifically agreed that their at-will agreement could not be changed in any way, which constitutes a "waiver" of their right "to advocate concertedly … to change his/her at-will status," that was problematic. Thus, the provision in Red Cross more clearly involved a waiver of Section 7 rights compared to Mimi’s Café’s at-will provision.

Takeaways: It appears that the General Counsel has decided to take a more relaxed view of at-will disclaimers by distinguishing Red Cross. Employers, however, should review their employment-at-will disclaimers and keep the following in mind:

  • At-Will Disclaimers Should Defend Against Potential Legal Actions That the Handbook Created a Contract: To the extent an at-will disclaimer includes language that nothing in the handbook is intended to create a contract, promise or representation of employment, it looks like it will be upheld so long as the overall purpose of the at-will policy can be interpreted to defend against potential legal actions by employees asserting that the handbook created an enforceable contract of employment, rather than violate an employee’s Section 7 rights.
  • Ensure the At-Will Relationship is Modifiable: If the at-will disclaimer is modifiable in any way, even if only one particular person, it will likely pass muster – just keep the word "I" out of it (see below). 
  • There’s No "I" In At-Will Disclaimers: An at-will employment acknowledgment or disclaimer that uses the personal pronoun "I" to signify that the employee specifically agrees their at-will employment cannot be modified will be unlawful.

The parties in both cases settled before the Board could review the ALJ’s decisions. Thus, the law on this issue remains unsettled. As such, the Acting General Counsel asked the Regional Offices to submit cases involving employer handbook at-will provisions to the Division of Advice for further analysis and coordination. So, stayed tuned as there is certainly much more we can expect on this issue.