On February 21, 2023, the National Labor Relations Board (“NLRB”) issued a decision in the case of McLaren Macomb, Case No. 07-CA-263041. In this decision, the NLRB ruled that an employer, McLaren Macomb, violated the National Labor Relations Act (“NLRA”) when it permanently furloughed 11 employees and offered them a severance agreement containing provisions requiring the employees to agree not to discuss the agreement with anyone or ever say anything that “could disparage or harm the image of” the company or its affiliates. This decision shocked a lot of employers because “confidentiality” and “non-disparagement” provisions are extremely common in severance agreements. Employers are worried that the severance agreements they have been using for years are now invalid.
What is a severance agreement?
A severance agreement, sometimes called a separation agreement, is an agreement an employer asks employees to sign at the time their employment ends. The employer usually agrees to pay the employee some amount of money, in exchange for promises that the employee will not sue the company, share information they learned while working there, etc.
Best Wrongful Termination Lawyer Blogs on Point:
- What To Know About Severance Agreements
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- Top Employment Lawyer Reply: Should I Get My Severance Agreement Reviewed Before I Sign?
What was illegal about McLaren Macomb’s severance agreement?
The NLRA protects employees’ rights to engage in “concerted activities” for “mutual aid or protection.” As the NLRB put it in McLaren Macomb, the Act protects “employee efforts to improve terms and conditions of employment or otherwise improve their lot as employees,” both by communicating with coworkers and by communicating with “administrative, judicial, legislative, and political forums, newspapers, the media, social media, and communications to the public that are part of and related to an ongoing labor dispute.” McLaren at 6. The NLRB determined that the specific language of McLaren Macombs’s severance agreement violated the employees’ rights to communicate about a labor dispute.
The NLRB examined the specific language of the confidentiality and non-disparagement agreements and found that the provisions would be likely to “interfere with, restrain, or coerce” employees in exercising their rights – even if the employees did not sign the agreement. Let me repeat that: McLaren Macomb broke the law just by asking employees to sign the severance agreement that contained those provisions. The NLRB explained that it does not matter if the agreement personally restrained these individuals because the National Labor Relations Act “is to be performed in the public interest and not in vindication of private rights.” The NLRB will enforce the law in order to prevent employers from attempting to stop other employees from engaging in protected communications.
The NLRB reasoned that the confidentiality provision was illegal because it would “prohibit the subject employee from discussing the terms of the severance agreement with his former coworkers who could find themselves in a similar predicament facing the decision whether to accept a severance agreement.” Qualifying employees have a right to talk to coworkers about things the boss is asking them to sign.
The non-disparagement provision in the McLaren Macomb severance agreement was illegal because it demanded that employees agree never to say anything that could damage the reputation of the company. That would pretty clearly prohibit employees from exercising their right to “critique…employer policy” or “publicize labor disputes.” Importantly, I think that the NLRB was concerned that the provision would prohibit the employees from discussing working conditions with former coworkers who are still employed at the company. For example, if an employee believes she was fired due to her gender, and then former coworkers approach her to discuss their discontent with the gender discrimination at work, it is important for her to be able to communicate her experiences so that the current employees can exercise their right to act together for improved working conditions.
Best Employee’s Rights Attorney Blogs on Point:
- Should I Consult A Lawyer About My Severance Agreement? Attorney’s Best Reply!
- Severance Packages and Employees’ Rights to File a Charge of Discrimination with the EEOC
What does this decision mean for the future?
First of all, if your employer has offered you a severance agreement, call the right attorney. You should get an experienced attorney to evaluate whether or not your employer has broken the law. Depending on the circumstances and the wording of the agreement, you may be able to pursue claims.
The McLaren Macomb decision was specifically about a severance agreement that the employer wrote and presented to employees at the time they were permanently furloughed. There has been a lot of discussion among employment discrimination and labor attorneys about whether the decision applies to settlement agreements jointly negotiated by the parties in a lawsuit. The NLRB decision did not address that issue, so it remains to be seen. However, based on employment lawyers’ reading of the decision, we think it is likely that the NLRB would say that negotiated settlements cannot contain broad confidentiality and non-disparagement provisions like the ones in McLaren Macombs. The law in this area is constantly changing. The specific wording of each agreement matters, and our attorneys are knowledgeable and staying on top of new developments.
What should I do if I think that my boss is violating my rights?
Best Employment Lawyer Answer: If your employer has offered you a severance agreement or you think you have been wrongly terminated, call the right attorney to schedule a free and confidential consultation. (Read: What is the Spitz No Fee Guarantee?; Why Having Skilled Employment Attorneys Is Critical). Call our lawyers in Ohio, Michigan, and North Carolina to get help now. Spitz, The Employee’s Law Firm and its experienced attorneys are dedicated to protecting employees’ rights and solving employment disputes.
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