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Advice Memos find at-will clauses in two employee handbooks are lawful

NLRB Acting General Counsel Lafe Solomon today released an analysis of at-will employment clauses in two employee handbooks, finding that both are lawful under the National Labor Relations Act.

Charges filed with the NLRB alleged that the handbooks, distributed by a California trucking company and a restaurant in Arizona, defined at-will employment so broadly that employees would reasonably think they could not engage in activity protected by the National Labor Relations Act. However, the two memos prepared by the NLRB’s Division of Advice in Washington DC found that they were not overly broad.

As both memos explain, an employer violates the Act by maintaining work rules or policies that explicitly prohibit NLRA-protected union or 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 a handbook maintained by Rocha Transportation in Modesto, California advised drivers that their employment is at-will and may be terminated at any time. “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,” it continued. “Only the president of the Company has the authority to make any such agreement and then only in writing.” The Division of Advice Memo notes that this clause explicitly states that the relationship can be changed, and so employees would not reasonably assume that their NLRA rights are prohibited.

At Mimi’s Café in Casa Grande, Arizona, the Teammate Handbook description of at-will employment includes the sentence: “No representative of the Company has authority to enter into any agreement contrary to the foregoing “employment at will” relationship.” The Advice Memo found this was not unlawfully broad because the clause does not require employees to agree that the employment relationship cannot be changed in any way, but merely highlights that the employer’s representatives are not authorized to change it.

The Advice Memos are provided as guidance for employers and human resource professionals in a developing area that has drawn considerable attention recently. They distinguish the language in the two handbooks from another at-will clause that was recently found by an NLRB Administrative Law Judge to be unlawfully broad. That case was settled before Board review.

Because Board law in this area remains unsettled, the 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.

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