National Labor Relations Board Finds At-Will Clauses in Two Employee Handbooks Lawful

On October 31, 2012, the National Labor Relations Board (NLRB) Acting General Counsel released two advice memos that analyze at-will employment clauses in two employee handbooks. 

Charges filed with the NLRB alleged that the handbooks (one distributed by Rocha Transportation in California, the other by Mimi’s Café in Arizona) were too broad in their definitions of at-will employment and could reasonably lead employees to believe that they could not engage in activity protected by the National Labor Relations Act, such as forming or joining a union. 

Rocha Transportation’s employee handbook contained the following clause:  “Employment with Rocha Transportation is employment at-will.  Employment at-will may be terminated with or without cause and with or without notice at any time by the employee or the Company.  Nothing in this Handbook or in any document or statement shall limit the right to terminate employment at-will.  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.  Only the president of the company has the authority to make any such agreement and then only in writing.” 

The NLRB concluded that because this clause provides that the relationship can be changed, employees would not reasonably assume that their National Labor Relations Act rights are prohibited.  The Rocha Transportation advice memorandum can be accessed by clicking here. 

The Mimi’s Café employee handbook contained the following clause:  “The relationship between you and Mimi’s Café is referred to as ‘employment at will.’  This means that your employment can be terminated at any time for any reason, with or without cause, with or without notice, by you or the Company.  No representative of the Company has authority to enter into any agreement contrary to the foregoing ‘employment at will’ relationship…” 

The advice memo issued by the NLRB concludes that this clause is not unlawfully broad because it does not require employees to agree that the employee relationship cannot be changed in any way, but merely states that the employer’s representatives are not authorized to change it.  The Mimi’s Cafe advice memorandum can be accessed by clicking here.

These two advice memoranda distinguish the language in the Rocha Transportation and Mimi’s Cafe handbooks from another at-will clause that earlier this year was found by an NLRB Administrative Law Judge to be unlawfully broad.  See American Red Cross Arizona Blood Services Region, Case 28-CA-23443.  The American Red Cross at-will clause at issue in that case read as follows:  “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” 

In addressing this language, the Administrative Law Judge noted that “it is somewhat questionable as to whether that language expressly restricts Section 7 activity.  After all, the phrase in question does not mention union or protected concerted activity, or even the raising of complaints involving employees’ wages, hours and working conditions.  However, in my view there is no doubt that ‘employees would reasonably construe the language to prohibit Section 7 activity.’”  Id.  (internal citations omitted). 

These decisions illustrate the NLRB’s scrutiny of typical boilerplate at-will employment clauses and the NLRB’s efforts to protect rank-and-file employees’ rights to unionize or otherwise organize.  They also highlight the fact that the law in this area remains somewhat uncertain.  Indeed, the Associate General Counsel who authored the Rocha Transportation advice memo concluded by stating, “[b]ecause the law in this area remains unsettled, the Regions should submit to the Division of Advice all cases involving employer handbook provisions that restrict the future modification of an employee’s at-will status.”


Please feel free to contact me directly at (336) 333-6375 to discuss this case or other North Carolina employment law matters.  For more information about my Greensboro law firm of Sharpless & Stavola, please visit our website at www.sharpless-stavola.com.