NLRB Issues Memo on Severance Agreement Guidance
On March 22, 2023, National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo (GC Abruzzo) issued GC Memo 23-05 providing guidance on the NLRB’s recent decision in McLaren Macomb. This guidance makes clear that the McLaren Macomb decision has retroactive effect, applying to severance agreements that predate its publication, and set a rule that overly restrictive severance agreements are unlawful.
Most notably, the memo explains the kinds of severance agreement terms that could violate the NLRA if proffered, maintained or enforced, including confidentiality, non-disclosure and non-disparagement provisions. GC Abruzzo’s key concern is the avoidance of “overly broad provisions that affect the rights of employees to engage with one another to improve their lot as employees.” GC Abruzzo also maintains that “future rights of employees as well as the right of the public may not be waived in a way that precludes future exercise of [NLRA] Section 7 rights[.]”
The memo also explains the circumstances under which the severance agreement prohibitions could apply to supervisors, who ordinarily do not enjoy the same range of NLRA rights as non-supervisory employees. GC Abruzzo made clear that if there is a severability clause that covers the offending provisions, overly restrictive severance provisions will not usually make the severance agreement null and void as a whole.
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