NLRB renders broad confidentiality and non-disparagement provisions in severance agreements unlawful
By: Angel Berberena, Esq.
Edgardo Rodríguez-LaFontaine, Esq.
February 24, 2023
On February 21, 2023, the National Labor Relations Board (the “Board”) issued a decision establishing new restrictions on employee severance agreements.
The Board ruled in McLaren Macomb, 372 NLRB No. 58, that an employer violates Section 8(a)(1) of the National Labor Relations Act (“NLRA”) when using severance agreements containing overbroad confidentiality and non-disparagement provisions that preclude an employee from assisting coworkers with workplace issues concerning their employer and from communicating with others, including a union and the Board, about his employment.
The Board’s decision means that severance agreements, in both unionized and non-union workplaces, could be deemed unlawful if they could be construed to interfere with, refrain, prevent, or coerce the worker’s right to engage in protected concerted activity related to the terms and conditions of employment (which includes the employees’ right to speak about the severance agreement or otherwise talk negatively about their former employer).
Although the Board did not specifically address whether a disclaimer could save such provisions, the decision appears to suggest that confidentiality and non-disparagement restrictions in severance agreements may be enforceable by complying with the following:
- Including temporal limitations;
- Limiting the confidentiality and non-disparagement restrictions;
- Narrowing the definition of confidentiality and non-disparagement;
- Affirmatively allowing the employee to: exercise his/her rights under Section 7 of the NLRA; to file, and assist others in filing, unfair labor practice charges; cooperate with the Board’s investigative process; assist coworkers with workplace issues; and to share the content of the agreement with coworkers in comparable circumstances, union officials and the Board.
Follow-up case law and General Counsel advisory memos will likely provide more precise guidelines to further define acceptable confidentiality and non-disparagement provisions.