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Is Your Employment At Will Policy Legal?

The National Labor Relations Board (“NLRB”) continues its invasion of union-free workplaces.  Its next target is employee handbook provisions confirming the employment relationship is “at will,” meaning it can be terminated unilaterally by either the employer or the employee for any lawful reason.

Employers often include at-will language in their handbooks to avoid claims that an employment contract exists where none was intended.  Generally, these provisions state that only a top executive of the company can alter the at-will relationship, and only in writing.  In the absence of such language, casual comments or even the very existence of a handbook could be misconstrued as giving rise to a contractual relationship.  If an employment contract exists, the employer cannot fire the employee without adequate cause, so it is critical for employers to maintain employment at will unless they consciously choose to enter into a contractual relationship.

Employers have been including at-will provisions in their handbooks for decades without question as to their legality under the National Labor Relations Act (“NLRA”).  However, the NLRB has recently challenged such provisions in two cases.  In one, an administrative law judge for the NLRB found the policy violated the NLRA; the other case settled with an agreement to rescind and revise the provision.  The NLRB argues an employee could reasonably read an at-will provision to imply that even unionization would not alter the employment relationship.  Since the NLRB will likely not allow a disclaimer unless it addresses this issue, employers must choose whether to remove the provision altogether (a bad idea), modify it to specifically address unionization concerns, or keep the at-will language as is, in spite of the NLRB’s warnings.

This latest NLRB challenge stretches the NLRA beyond all previously recognized bounds.  It is unknown if any court will uphold the NLRB’s actions, but getting to the point of a court decision will be expensive and risky.  Presumably, the decision will be appealed.  Until that is resolved, employers who chose not to fight the NLRB have options.  One is weakening or removing your employment-at-will language but this leaves you vulnerable to employee lawsuits for breach of contract.  The safest bet to avoid the NLRB’s wrath but maintain some protections is to modify the at-will provision to specifically address the possibility that unionization could alter the employment relationship.  How to do this is unresolved but we have an idea.  Based on the NLRB’s reasoning, if your at-will language explains that it can be modified if an amendment is signed by both the company and someone acting on behalf of the employee, that might satisfy the NLRB’s concerns.  Of course, no one knows if this will work, but it may be worth the risk.  Alternatively, an employer could try to ensure nothing is ever said or written that would modify the employment-at-will policy that exists in practically every state in the United States.  Needless to say, such a practice is risky.  As the NLRB continues to attack this issue, corrective strategies will hopefully be clearer.  Stayed tuned for updates.

Brody and Associates regularly advises its clients on all labor management issues and provides various training programs.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.