A recent NLRB decision has effectively shifted the power dynamic between employers and employees.
On February 21, 2023, the National Labor Relations Board (NLRB) ruled that broad non-disparagement and confidentiality clauses in severance agreements are unlawful, and violate employee rights under the National Labor Relations Act (NLRA).
In simpler terms, employers will no longer be able to condition severance agreements on provisions that limit workers from speaking poorly about their company or revealing the terms of their severance agreement.
If you’ve recently agreed to a severance agreement containing non-disparagement and confidentiality provisions, this ruling directly affects the terms of your employment. Read on for details on the NLRB’s decision and my guidance for employees with layoff fears.
Reasons for the Decision
The NLRB came to its decision after the ruling of McLaren Macomb, 372 NLRB No. 58.
In February 2023, the NLRB found that severance agreements with broad non-disparagement and confidentiality clauses pose a “reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights,” per the National Labor Relations Act (NLRA).
Section 7 within the NLRA grants non-managerial or supervisory employees the right to speak publicly and with coworkers about their working conditions–and this applies to both current and former employees. Hence, the unlawfulness of non-disparagement and confidentiality provisions.
The real question, however, is what kind of impact this decision will have on employers, their employees, and the countless U.S. workers who’ve been laid off in recent months.
Impact on Severance Packages
In a recent Scripps News appearance, I discussed the potential impact of the NLRB’s decision on the size of severance packages offered by companies. While it remains to be seen, I anticipate that more employers will be meeting with their employment law attorneys, and determining the value of entering severance agreements with their employees moving forward.
A severance agreement may still buy the employer peace, in that an employee may not sue them in the future. However, it won’t buy peace in the sense that an employer can limit employees from speaking negatively about the company, or disclosing the terms of their agreement.
Looking forward, this may cause employers to pull back on severance agreements, or to offer less money than they have in the past.
With non-disparagement and confidentiality clauses in severance agreements now deemed unlawful, workers are no longer required to remain silent after severing ties with their employers. However, employers may offer less money or even pull back on severance agreements.
It is important that both employers and employees seek guidance from experienced employment attorneys to navigate this new landscape. And of course, should a dispute or lawsuit arise, hiring an experienced mediator or Alternative Dispute Resolution expert to help the parties settle and resolve the matter is a good choice and option as well.
Experienced Employment Law Attorney, Mediator, Arbitrator, Investigator, Legal, and Media Commentator
Twice-named a U.S. News Best Lawyer in America for employment and labor law, Angela Reddock-Wright is an employment and labor law attorney, mediator, arbitrator, and certified workplace and Title IX investigator (AWI-CH) in Los Angeles, CA. Known as the “Workplace Guru,” Angela is an influencer and leading authority on employment, workplace/HR, Title IX, hazing, and bullying issues. Furthermore, she’s been named a “Top 50 Woman Attorney” in California by Super Lawyers, a “Top California Employment Lawyer” by the Daily Journal, and one of Los Angeles’ “Most Influential Minority and Women Attorneys” by the Los Angeles Business Journal.
Angela is a regular legal and media commentator and analyst and has appeared on such media outlets as Good Morning America, Entertainment Tonight, Law and Crime with Brian Ross, Court TV, CNN, NewsNation, ABC News, CBS News, Fox 11 News, KTLA-5, the Black News Channel, Fox Soul – The Black Report, NPR, KPCC, Airtalk-89.3, KJLH Front Page with Dominique DiPrima, the New York Times, the Washington Post, the LA Times, Forbes.com, Yahoo! Entertainment, People Magazine, Essence Magazine, the Los Angeles Sentinel, LA Focus, Daily Journal, Our Weekly and the Wave Newspapers.
Angela is a member of the panel of distinguished mediators and arbitrators with Signature Resolution, a California dispute resolution company. She also owns her own dispute resolution law firm, the Reddock Law Group of Los Angeles, specializing in the mediation, arbitration, and investigation of employment discrimination, harassment, retaliation, and other workplace claims, along with Title IX, sexual harassment, assault, and misconduct conduct cases, along with hazing and bullying cases in K-12 schools, colleges, and universities, fraternities and sororities; fire, police and other public safety agencies and departments; and other private and public sector workplaces.
Be sure to follow me on Facebook and Instagram @iamangelareddockwright, LinkedIn at Linkedin.com/in/angelareddock, and tune in to my weekly radio show, KBLA Talk 1580’s Legal Lens with Angela Reddock-Wright each Saturday and Sunday at 11 am PST, or catch past episodes on Anchor.fm/Spotify. You can learn more about the radio show here – https://angelareddock-wright.com/radio-show/.
Also, learn more about my book – The Workplace Transformed: 7 Crucial Lessons from the Global Pandemic – here – https://angelareddock-wright.com/book/.
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For more information regarding resources for employers, businesses, and employees during this time, connect with Angela on LinkedIn for new updates or contact her here. You may also follow her on Instagram.
This communication is not legal advice. It is educational only. For legal advice, consult with an experienced employment law attorney in your state or city.