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Executive Summary: During the past year, the
National Labor Relations Board has begun chipping away at the
employment at-will doctrine. Based on the activities of one
of its regional offices, the Board appears intent on limiting the
at-will doctrine by finding that at-will acknowledgments in
employment handbooks violate employees' Section 7
rights.1
Over the past few years, it has been no secret that the Board
has taken an increasingly anti-business approach in its application
of federal labor laws. So it comes as no surprise that the
Board has begun to take aim at its latest target: at-will
employment.
Currently, many states follow the employment at-will doctrine,
which essentially states that an employer can terminate an employee
for good cause, bad cause, or no cause at all; the cause just
cannot be unlawful. An unlawful cause for termination, for
example, would be terminating an employee based on his or her
membership in a protected group (e.g., race, national origin, age,
etc.). At-will employment, however, can be altered by
contractual agreement between the employer and the employee.
Therefore, most employers include at-will statements in their
employment handbooks to ensure that these handbooks are not
construed as contracts for employment. Until recently, these
at-will acknowledgments have been largely unchallenged.
Unfortunately, the Board recently fired its latest salvo against
employers by claiming that many of these at-will acknowledgments
may violate employees' Section 7 rights. For example,
Hyatt Hotels settled a case with a regional director of the Board
after its at-will acknowledgment (along with other policies) was
challenged as an unlawful interference with employees' Section
7 rights. As part of the settlement, Hyatt agreed to change
its at-will acknowledgment across the country and rescind and
revise existing acknowledgments. Additionally, it posted
notices informing employees of the changes to the handbook
acknowledgments. In the Matter of Hyatt Hotels
Corp., Case No. 28-CA0061114.
What is most troubling about this case is that the
acknowledgment provided for an exception to the general at-will
rule. Hyatt Hotels' exception allowed an employee to
change his or her at-will status if both the employee and either
the Executive Vice President or President signed an agreement
permitting the change. These facts are troubling because this
exception inherently recognizes that an employee (or employees)
could potentially negotiate with their employer to alter their
at-will status, which is the type of concerted activity Section 7
protects.
Moreover, employment at-will still restricts an employer from
terminating employees for unlawful reasons. If an
employer terminates an employee for engaging in activity protected
by Section 7, then the employer can still be charged with –
and punished for – an unfair labor practice specifically
because the termination was unlawful. Whether the employee
who was terminated in violation of Section 7 was employed at-will
is immaterial. Therefore, employment at-will in no way
inhibits the purposes of Section 7.
Employers' Bottom Line
This latest attempt by the Board to insert itself into an area
of law it has previously left untouched, although troubling, is not
surprising. Recently, the Board has taken a broad view of
Section 7 rights in the workplace by attacking companies'
social media policies and arbitration agreements.
Accordingly, it should come as no surprise that the Board appears
to be taking such a radical position on the employment at-will
doctrine. Companies, however, should not immediately rush to
change their at-will acknowledgments. At this time, these
attacks on the at-will doctrine have been limited to just one of
the Board's many regions (Region 28 in Arizona). The
Board has not issued any rulings with respect to whether at-will
acknowledgments violate Section 7. And, as the federal court
system's near universal rejection of the Board's position
on arbitration agreements indicates, the courts will be there to
operate as a check on the Board's authority in case the Board
oversteps its bounds.
Footnotes
1. Section 7 rights include the right to engage in
concerted activities for the purpose of collective bargaining or
other mutual aid or protection. These rights apply equally to
unionized and non-unionized workplaces.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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