News & Updates

NLRB's General Counsel Issues Halloween Guidance on Employee Handbook At-Will Disclaimers November 1, 2012

Earlier this year, non-union employers (approximately 93% of private industry in the United States) and many labor and employment attorneys were surprised to learn that the National Labor Relations Board (NLRB) might deem rudimentary employee handbook at-will disclaimer language to violate employees’ rights under the National Labor Relations Act (the Act). Employee handbook at-will disclaimers are particularly common in states, like New York, where courts have held that the absence of such provisions helped to create an implied contract that limited the employer’s right to terminate the employee at-will. As a result, prudent employers provide clear and unambiguous disclaimer notices in their employee handbooks -- stating that the handbook does not create a contract of employment and that the employment relationship is at-will. Such disclaimer language generally is placed at the beginning of the employee handbook and reminds employees that the employment relationship can be terminated at any time, for any reason. Typically, the acknowledgment/receipt form signed by the employee also contains similar disclaimer language, including a reminder that the employment relationship is at-will.

In order to clarify the NLRB’s position, its Office of General Counsel offered non-union employers a few Halloween “treats” in the form of two Advice Memo’s (dated October 31, 2012) finding that the at-will disclaimers in handbooks issued by a California trucking company and an Arizona restaurant were lawful under the Act. As set forth in both memos, an employer violates the Act by maintaining work rules or policies explicitly prohibiting “protected concerted activity,” such as joining a union or discussing terms and conditions of employment with coworkers. Even if not explicit, a rule can be unlawful if employees would reasonably construe the language to prohibit such activity.

The clause in the California trucking company’s handbook advises its drivers of their at-will employment status and that it may be terminated at any time. In addition, the trucking company’s handbook states that “[n]o manager, supervisor, or employee of [the Company] 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  . . . [o]nly the president of the company has the authority to make any such agreement and then only in writing.” The Advice Memo notes that because the clause explicitly states that the relationship can be changed, employees would not reasonably assume that they would be prohibited from engaging in protected concerted activity.

The at-will disclaimer provision in the Arizona restaurant’s handbook provides, among other things, that “[n]o representative of [the Company] has authority to enter into any agreement contrary to the foregoing ‘employment at-will’ relationship.” The Advice Memo explains that this clause is not unlawfully broad because it does not require employees to agree that their employment relationship cannot be changed in any way. Rather, it merely highlights that the employer’s representatives are not authorized to change it.

The NLRB maintains that these October 31, 2012 Advice Memos are provided as guidance for employers and human resource professionals in a developing area that has drawn considerable attention recently and they distinguish the permissible language in the two handbooks from another at-will clause previously found by an NLRB administrative law judge to be unlawfully broad. That case was ultimately settled before NLRB review.

Because the NLRB’s position in this area remains unsettled, the agency’s Acting General Counsel is asking all Regional Offices to submit cases involving employer handbook at-will provisions to the Division of Advice for further analysis and coordination. In the meantime, non-union employers should review the at-will provisions in their employee handbooks, and any other communications with employees, and revise the disclaimer language (if necessary) to minimize the risk that the NLRB will find that language to be overly broad and in violation of the Act.

For more information on this issue, or for assistance with preventative measures to reduce the risk of such claims under the Act, please contact: