Last week, the National Labor Relations Board (NLRB) issued a decision (in the case McLaren Macomb) that renders it unlawful for employers to include confidentiality or non-disparagement provisions in some severance agreements. There is a lot that remains unclear, for example:
Are these provisions absolutely prohibited? Is there specific language the NLRB will accept?
How will this be enforced? Note: Currently the NLRB cannot issue monetary fines, but there is a bill pending that would allow it to impose fines up to $100,000.
Does this ruling also impact non-disparagement provisions in employment agreements?
Does this decision have any impact on existing severance agreements?
Employers will respond differently to this decision. Some may elect to make no changes to their agreements. Others may continue including the provisions but will add some disclaimer language, while the most risk averse employers will remove these provisions altogether. We can help you make these decisions.
One thing that is important to remember is that not all employee severance agreements will be impacted. Managers are not covered by the NLRA, so if that is the population you generally prepare these agreements for, you are in the clear.
We expect more guidance from the NLRB on what these agreements need to say in order to be compliant in the coming months and will keep you updated when we receive helpful information.