In its recent decision in Jones Plastic & Engineering Co., the National Labor Relations Board ("NLRB") confirmed that designating an employee as "at-will" does not change his status as a permanent replacement for a striking union worker.

Employers May Permanently Replace Economic Strikers

It is well established law that economic strikers (those on strike over terms and conditions of employment — rather than over unfair labor practices) who offer to return to work without conditions are entitled to immediate reinstatement, unless the employer can show a legitimate and substantial business justification for refusing to reinstate the former strikers. One acceptable business justification is where an employer has permanently replaced the former striker so it can continue its operations during a strike. The employer bears the burden of proving that the replacement worker is "permanent."

An At-Will Relationship Does Not Impact Replacement Status

The NLRB found that Jones Plastic's at-will disclaimers in its standard application form and handbook did not undermine the replacements' permanent nature. Even though the standard application form specified that "employment is for no definite period and may ... be terminated at any time without any previous notice," and the employee handbook and a form signed by replacement workers contained similar disclosures, they could still be "permanent."

The NLRB reiterated that "'permanent replacement' connotes a replacement who will not be displaced by returning strikers when the strike is over." In contrast, an at-will disclaimer "merely serves as a reminder to the replacement employees of the existing right under state law to terminate any employee with or without cause." Such disclaimers are not inconsistent with, nor do they detract from, an otherwise valid showing of permanent replacement status. The NLRB went on to find that the Jones Plastic workers were permanent replacements because: (1) the employer issued forms stating that the workers were permanent replacements (albeit at-will) for the striking employees, and many of the forms identified the specific striker that the new hire was replacing, (2) the employer sent a notice to the strikers that it had begun hiring permanent replacements, and that they risked permanent replacement if they did not return to work, and (3) the human resources manager told at least one replacement that he was a permanent employee.

The Impact of the Jones Plastic Decision

The NLRB's ruling supports employers' use of standard at-will disclaimers with replacement workers, without jeopardizing the permanent status of the replacements. As always, even where an employer hires permanent replacements, it is still required to put the replaced strikers who offer to return without conditions on a preferential recall list.