Accessibility Tools

Skip to main content

Labor Board Limits Common Severance Agreement Provisions

Written on .

The National Labor Relations Board (NLRB) seems to be on a mission to make the life of employers more difficult.  The latest is a ruling prohibiting employers offering employees a severance agreement that prohibits them from making disparaging statements about the employer and from disclosing the terms of the severance agreement itself.  McLaren Macomb, 372 NLRB No. 58 (2/21/23).  The Board majority in its ruling found that broad non-disclosure and non-disparagement provisions in severance agreements violate the Labor Act, reversing prior rulings during the Trump Administration.

The result of the ruling is to render such broad provisions unenforceable, particularly if an employer decides to enforce the severance provision that is considered illegal under the new standards.  The ruling does suggest narrower provisions that can protect employers, and some employers may also consider using disclaimers to improve the legality of the provisions.  It is likely, however, that the existence of such overbroad and illegal provisions would not adversely affect enforceability of the remainder of the severance agreement itself, particularly if there is a severability clause.  

Editor's Note:  It should be noted that this ruling will not apply to managers, supervisors, managerial employees, or others exempt from coverage of the National Labor Relations Act (NLRA).  Such controversial clauses can often be a deterrent to appropriate conduct, even if they are potentially illegal.  It is suggested that the provisions be drafted narrowly and appropriate disclaimers be included, and employers may choose to run a minor risk anyway.

This article is part of our April 2023 Newsletter.

View newsletter online

Download the newsletter as a PDF

Related Content

Get Email Updates

Receive newsletters and alerts directly in your email inbox. Sign up below.
From the historic bronze doors at Los Angeles City Hall.

NLRB to Seek Rescission of past Discipline Imposed under Overbroad Employer Work Rules

In a memo issued during April, NLRB General Counsel Jennifer Abruzzo announced that when the NLRB seeks to rescind overbroad and thus ill...
dashcam

Do Drive Cam Cameras inside Trucks Violate Employee Rights?

As a safety measure, many employers with driver employees have installed cameras inside the cab to alert drivers and monitor their safe d...
amazon app, mobile phone, table, indoors

Amazon Considers Risk When Investigating Employee Misconduct

In a legal conference in March, Amazon Corporate Counsel Lee Langston stated that aggressive enforcement actions of the NLRB have impacte...
Person signing a contract

Latest NLRB Attack Goes beyond Non-Compete Agreements to Reach Outside Employment

An interesting article concludes that the NLRB is invalidating employer rules "one clause at a time."  On January 31, 2024, the NLRB's Di...
black lives matter painted on a wall

NLRB Board Addresses BLM Insignia at Work

In a February 21, 2024 ruling, the NLRB reversed an administrative law judge's conclusion that writing "Black Lives Matter" (BLM) on apro...
indoors, workplace

Walk-Around Rule Allowing Union Reps to Accompany Safety Inspectors to Go into Effect

The U.S. Occupational Safety and Health Administration (OSHA) released its "Walk-Around Rule" in April, to take effect on May 31, 2024.  ...