NLRB Doubles Back: Severance Agreements Cannot Require Employees to Waive NLRA Rights

In a return to pre-Trump era precedent, the National Labor Relations Board (“NLRB”) has determined that employers violate federal labor law if they offer severance agreements prohibiting employees from making disparaging statements about their employer or disclosing the terms of the severance agreement.

In McLaren Macomb (Case #07-CA-263041), the NLRB held that an employer violates Section 8(a)(1) of the National Labor Relations Act (“NLRA”) when it provides employees with severance agreements that broadly restrict employees’ NLRA rights. Section 7 of the NLRA protects employees’ rights to “self-organization, to form, join or assist labor organizations, to bargain collectively through representatives of their own choosing and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” and the right “to refrain from any or all such activities.” In making its decision, the NLRB found that severance agreements with confidentiality or non-disparagement provisions inherently interfere with employees’ NLRA rights.

Importantly, this decision is limited to rights under the NLRA – retaining an employer’s ability to include other restrictions commonly incorporated in severance agreements.

We will continue to monitor this and other related employment and labor law developments. For questions regarding how this will affect your severance agreements, please contact Lisa M. Scidurlo, Michael G. Tierce or the Stevens & Lee attorney with whom you regularly work.