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Thursday, 29 November 2012 19:57

Standard Employee "At-Will" Waiver Language Found Unlawful

It is standard practice for employers of non-union employees to include at-will employment language in their employee handbooks or contracts.  The goal is to inform the employee that employment is terminable without cause, at the will of either party.  Two recent NLRB cases have made widely used language that is intended to prevent unintended modification of an at-will employment relationship unlawful under federal law.


In American Red Cross Arizona and Lois Hampton, Lois Hampton was found to have been discharged from employment for engaging in concerted activity, protected by Section 7 of the National Labor Relations Act ("NLRA").  As part of the argument, the Board's General Counsel contended that language in the employee handbook, which employees were required to sign, was overly-broad and discriminated against protected activity.


The offending provision read: "I further agree that the at-will employment relationship cannot be amended, modified or altered in any way."


The administrative law judge found that the clause effectively premised employment on the employee's agreement not to make any efforts or engage in conduct that could result in collective-bargaining, which would amend, modify or alter the at-will relationship.  As such, it violated Section 8 of the NLRA.


In Hyatt Hotels Corporation and United Here International Union, an employee complaint was filed with the board which alleged that language in an employee handbook was overly-broad and discriminated against protected activity.  The clause read: "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."


The parties settled before a decision was made.  As part of their agreement, Hyatt rescinded the acknowledgement forms signed by all affected employees, as well as revised the allegedly overly-broad and discriminatory clause of its employment handbook.


In both these cases, the employers were required to reemploy the terminated employees, rescind and revise their at-will clauses, inform their employees of the revisions, and were required to post notices advising the employees that they will respect the employee's rights under the NRLA.


What Does This Mean for Employers?


The impact of these cases may signify a dramatic shift in the balance of the at-will employment relationship.  Employers would be wise to review their current handbooks and contracts for similar language and modify it accordingly.


At-will employers should look for any language which could be reasonably construed as "chilling" or restricting an at-will employee's bargaining rights under Section 7 of the NRLA.  Complete revisions or, at a minimum, adding a savings clause may limit exposure to judicial intervention in at-will employment relationships.


For more information about at-will language or employee handbooks, please contact Attorney Peter Culp or another qualified employment law attorney with the Dempsey Law Firm.


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