On October 31, 2012, the NLRB did something it has not done too often in recent years: it delivered some good news to employers. In two Memoranda from the Board’s Division of Advice, the Board found “at will” disclaimers in employee handbooks to be lawful. In so doing, the Board contrasted the disclaimers with one that was struck down by an Administrative Law Judge in February.
The issue presented by the disclaimers is whether or not employees could reasonable interpret them to prohibit employees from engaging in protected concerted activity under the NLRA. In the February American Red Cross case, the handbook disclaimer provided as follows: “I further agree that the at will employment relationship cannot be amended, modified, or altered in any way.” The ALJ found this to be illegal because the use of the word “I” could be interpreted to mean that employees were being asked to waive their right to act collectively or try to alter their at will status by forming a union.
In contrast, the clause in the handbook maintained by Rocha Transportation stated “Employment with Rocha transportation is at will … [n]o 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.” The disclaimer went on to state “[o]nly the president of the Company has the authority to make any such agreement and then only in writing.” At Mimi’s Café , the handbook provided: “The relationship between you and Mimi’s Cafe is employment at will… [n]o representative of the Company has authority to enter into any agreement contrary to the foregoing “employment at will” relationship.”
The Board found the later two disclaimers permissible because they could not reasonably be understood to mean that the at will relationship could not be changed in any way. In the Rocha Transportation case, the Company president had the authority to alter the relationship. in the Mimi’s Café case, the disclaimer said only that no one at the company was authorized to alter the relationship, and , unlike the Red Cross case, it did not require employees to agree that the at will relationship could not be changed.
Obviously, the distinction between these clauses is nuanced. In its October 31st guidance, the Board specifically states that the “law in this area remains unsettled.” However, it is encouraging to see that the Board is not taking a “hard line” stance and invalidating all at will disclaimers.