In two cases in early February 2013, the NLRB General Counsel’s office, Division of Advice, affirmed that carefully drafted contract disclaimers in employee handbooks may be found lawful as long as employees would not reasonably construe the language to prohibit protected concerted activity under Section 7 of the National Labor Relations Act (“NLRA” or the “Act”).  In the two cases, the Division of Advice opined in advice memoranda that employee handbook contract disclaimers commonly used by employers were lawful as employees would not reasonably construe the specific provisions to restrict Section 7 activity.  Section 7 of the Act provides to employees the right to organize a union and otherwise engage in protected concerted activities for mutual aid or protection.

In Fresh & Easy Neighborhood Market, the employer’s handbook described the “at-will” employment relationship and stated, in relevant part:

Nothing in this [Handbook] changes this at-will relationship, guarantees you a benefit, creates a contract of continued employment or employment for a specified term, or any contractual obligation that conflicts with the [Employer’s] policy that the employment relationship with its employees is at-will.

No representative of the [Employer] other than a[n Employer] executive has the authority to enter into any agreement for employment for a specified duration or to make any agreement for employment other than at will.  Any such agreement that changes at-will employment status must be explicit, in writing, and signed by both a[n Employer] executive and you.

The Handbook also contained an acknowledgement clause to be signed by employees which reiterated the contract disclaimer in slightly different language:

I understand that my employment is at-will, meaning that my employment is for no definite term and . . . the [Employer] has the right to discipline me or terminate my employment or change the terms of my employment . . . at its discretion, at any time, with or without cause or advance notice. I further understand that the foregoing provision regarding my status as an at-will employee may only be changed by a written agreement signed by a[n Employer] executive and me that refers specifically to this provision.

Additionally, the acknowledgement form provided that all of the employer’s current policies, regulations, and benefits . . . may be changed from time to time at the discretion of the employer, except for the at-will employment and arbitration policies.

In Windsor Care Centers, the Division of Advice similarly opined that the employer’s employment at-will policy was not unlawful.  Windsor Care Centers’ employee handbook provision provided as follows:

STATEMENT OF AT-WILL EMPLOYMENT STATUS:  Employment with the Company is at-will which means the employment relationship may be terminated with or without cause and with or without notice at any time by you or the Company.  In addition, the Company may alter an employee’s position, duties, title or compensation at any time, with or without notice and with or without cause.  Nothing in this Handbook or in any document or statement and nothing implied from any course of conduct shall limit the Company’s or employee’s right to terminate employment at-will.  Only the Company President is authorized to modify the Company’s at-will employment policy or enter into any agreement contrary to this policy.  Any such modification must be in writing and signed by the employee and the President.

In determining that the Windsor Care Centers’ and Fresh & Easy Neighborhood Markets handbook provisions did not violate the NLRA, the Division of Advice noted that the NLRB has developed a two-step inquiry to determine if a work rule would reasonably tend to restrict employees in the exercise of their Section 7 rights.  First, a rule is unlawful if it explicitly restricts Section 7 activities.  Second, if a rule does not explicitly restrict protected activities, it will nonetheless be found to violate the Act upon a showing that:

1. Employees would reasonably construe the language to prohibit Section 7 activities;
2. The rule was promulgated in responsive to Union activities; or
3. The rule has been applied to restrict the exercise of Section 7 rights.

The Division of Advice determined that the policies at issue in both Fresh & Easy Neighborhood Market and Windsor Care Centers did not explicitly restrict Section 7 activity and found no evidence that the employers promulgated the policies in response to union or other protected activity or that the policy was applied to restrict protected activity.  The Division of Advice also concluded that the contested handbook provisions would not be reasonably be interpreted to restrict an employee’s Section 7 right to engage in concerted attempts to change his or her employment at-will status.

The policies at issue mainly described the employees’ current status, which is that they were subject to termination with or without cause or notice and that the terms and conditions of employment may be changed unilaterally by the employer.  The advice memoranda explained that the disputed language simply described the method by which employees could, at present, create an enforceable employment contract with the employer modifying their at-will status.  Because the policy provisions did not require employees to refrain from seeking to change their at-will status collectively, or to agree that their at-will status cannot be changed in any way, the Division of Advice concluded that employees would not reasonably construe the provisions to restrict their Section 7 rights to select a collective bargaining representative and bargain collectively for a contract that would change that status.