Accessibility Tools

Skip to main content

The Latest      —

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

Get Email Updates

Receive newsletters and alerts directly in your email inbox. Sign up below.
end of words, pavement
The Trump Administration has acted to terminate TPS status for several countries.  Of course, litigation has followed each notice of termin…
we are hiring sign
The Economist magazine reports that job interviews are “the worst way to select people, except for all the others.”  One of the more encour…
fighting rams
Of primary importance is that the best avoidance is to recognize the early warning signs.  In other words, at the beginning of a confrontat…
shutdown, washington
A good amount of publicity has come out recently about two major closings that employers blame on their unions.  In the most recent, at the…
gavel
In December of 2025, an Oregon federal judge refused Union Pacific’s effort to set aside a $27 million verdict in a suit from the worker al…
hello
Discrimination rules applicable to national origin is a priority for the current chairperson of  the Equal Employment Opportunity Commissio…