NLRB Restricts Confidentiality and Non-Disparagement ProvisionsMar 24, 2023
The National Labor Relations Board (NLRB) recently issued a decision in McLaren Macomb restricting arguably two of the most important provisions of a severance agreement (other than the actual release) – the confidentiality provision and non-disparagement provision. A huge issue for employers is that NLRB opinion applies retroactively to severance agreements already issued to former employees.
If you provide severance agreements to employees, I recommend you have them reviewed by an employment lawyer in your state to make sure they are not unlawful.
In the meantime, here are some key points to keep in mind:
- Applicability- The new rule is retroactive to severance agreements signed prior to the opinion date of February 21, 2023.
- Enforcement - Employers can violate the Act merely by giving an unlawful severance agreement to an employee- it’s irrelevant whether the employee signs it or otherwise agrees to its terms.
- Supervisors- The National Labor Relations Act (NLRA) doesn’t cover “supervisors”, but the McLaren Opinion might cover them, if the employer is retaliating against a supervisor for a refusal to commit an unfair labor practice.
- Other Communications- The McLaren Opinion might also apply to other employer communications with employees, such as pre-employment offer letters.
- Confidentiality Clauses- must be narrowly tailored to restrict the dissemination of proprietary or trade secret information for a period of time based on legitimate business justifications, and cannot be overly broad.
- Non-Disparagement Clause – must be narrowly tailored to unlawfully defamatory statements and cannot be overly broad.
The full memo issued by NLRB general Counsel, Jennifer Abruzzo, can be found here.
As mentioned above, employers should review their agreements (employment agreements, severance agreements, non-compete agreements, confidentiality and NDA agreements) to make sure they are lawful and not in violation of the NLRB’s McLaren Macomb Opinion. If you have any questions, please reach out to The Wannos Law Firm, PA.
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Disclaimer: The information on this website is for educational purposes only. The information does not constitute legal advice, and does not create an attorney client relationship with Karly Wannos, The Wannos Law Firm, P.A. or any other attorney employed by the firm. Karly Wannos is licensed to practice law in Florida only, and the information presented on this channel applies to Florida and Federal law only and is not otherwise state specific. Please consult with an attorney before making any important business related decisions. The contents of this post are owned by Karly Wannos, and cannot be duplicated or replicated without her express written permission. May be deemed an attorney advertisement.
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