Wednesday, August 29, 2012

Employee Handbook Reviews: Take a Look at Your At-Will Disclaimer

There’s a new and surprising issue employers should be aware of when updating their employee handbooks this year:  the scope of their at-will disclaimer. A few months ago, in American Red Cross Arizona Blood Services Region and Lois Hampton, an NLRB administrative law judge (“ALJ”) held that the acknowledgement form contained in an employer’s handbook violated the National Labor Relations Act, which applies to almost all private employers. The language in question stated:

“I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.”

The ALJ reasoned that this language was an unfair labor practice because the “acknowledgement form is essentially a waiver in which an employee agrees that his/her at-will status cannot change, thereby relinquishing his/her right to advocate concertedly, whether represented by a union or not, to change his/her at-will status.” The ALJ went on to state, “For all practical purposes, the clause in question premises employment on an employee’s agreement not to enter into any contract, to make any efforts, or to engage in conduct that could result in union representation and in a collective-bargaining agreement, which would amend, modify, or alter the at-will relationship. Clearly such a clause would reasonably chill employees who were interested in exercising their Section 7 rights.”

Hyatt Hotels Corp. was subject to a similar unfair labor practice charge based on an employee handbook acknowledgement that stated:

 “I acknowledge that no oral or written statements or representations regarding my employment can alter my at-will employment status, except for a written statement signed by me and either Hyatt’s Executive VP/Chief Operation Officer or Hyatt’s President.”

Hyatt entered into a settlement agreement to resolve the matter. 

The NLRB’s new focus on at-will disclaimers is similar to its focus on social media policies. The Board is looking at general policy statements aimed at all employees and finding that they are too broad and “reasonably chill” employees in the exercise of their rights to engage together in “concerted activity” protected by the NLRA. Work rules or policies that “reasonably tend to chill employees in the exercise of their Section 7 rights” violate the National Labor Relations Act, even if the rule is never enforced in a way that impacts employees’ ability to engage in concerted activities to improve their wages and working conditions. 

It’s still very important, of course, for employers to include at-will disclaimers in their employee handbooks. Disclaimers are important in defending against claims that a statement by a co-worker or manager altered the at-will relationship. Right now, though, it’s unclear what type of at-will disclaimer the Board will approve. Employers should work closely with their legal counsel to find an at-will disclaimer that appropriately balances these competing concerns. In addition, employers should continue to watch this issue closely for future Board statements.

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