National Labor Relations Board Sets Limits on Severance Agreement Provisions

Last month, the National Labor Relations Board (NLRB) made a decision that changed the game regarding severance agreements. The ruling confirmed that overly broad confidentiality and non-disparagement clauses have a “clear chilling tendency” and that offering agreements with such provisions violates the law. However, the NLRB did not ban severance agreements outright, as long as they are narrowly tailored.

Severance agreements are still allowed, but with certain limitations as confirmed by the NLRB decision. Employers must take care to draft severance agreements that do not include overly broad confidentiality and non-disparagement provisions. These types of clauses create an environment in which employees may feel that they cannot speak out against their employer, even if they have legitimate concerns about the conditions of their employment or the workplace culture.

Overly broad confidentiality and non-disparagement provisions have a “clear chilling tendency.” The NLRB has found that confidentiality and non-disparagement provisions in severance agreements are unlawful when they prevent employees from exercising their rights under the National Labor Relations Act (NLRA). These provisions are overly restrictive and prevent employees from speaking out about legitimate concerns, which can be protected under the NLRA.

Employers should take caution when drafting severance agreements. According to the NLRB decision, offering agreements with overly broad confidentiality and non-disparagement provisions violates the law. This is because such provisions create a legally binding agreement that reinforces the employer’s efforts to restrict an employee’s protected rights.

The good news is that confidentiality and non-disparagement provisions in severance agreements are still permitted – as long as they are narrowly tailored. The NLRB decision reiterated the importance of narrowly tailoring such provisions, which should include a temporal limitation and should be conveyed as clearly as possible to avoid confusion.

According to the NLRB’s latest memo, employers should avoid using language that may interfere with their employees’ exercise of NLRA rights in any form of communication. This includes handbooks, policies, forms, and other less formal agreements such as severance agreements. It is suggested that supervisors should not discourage employees from discussing the terms of their severance agreements, nor should they retaliate against those who attempt to do so.

Employers need to be aware that the NLRB’s decision has a retroactive effect, i.e., it applies to both existing and new severance agreements. If they are found to have violated these provisions, employers may be subject to legal penalties or may be required to rewrite the provisions in question. Therefore, it is advisable for companies to review their existing severance agreements to ensure compliance with the new guidelines.

The importance of tailoring agreement language cannot be overstated. It is crucial for employers to carefully draft and tailor the language used in severance agreements. The NLRB decision serves as a reminder that boilerplate savings clauses or disclaimers will not necessarily cure overly broad provisions. Employers must reassure employees that they still have the ability to exercise their NLRA rights without fear of retaliation, censorship, or any other undue limitation.

The recent decision of the NLRB on severance agreements has established clear limits on confidentiality and non-disparagement provisions that are too broad. To avoid legal repercussions and difficulties, employers should meticulously draft the language used in severance agreements to restrict their employees’ NLRA rights as narrowly as possible. Employers should also avoid using language that could interfere with the exercise of NLRA rights in any other communications with their employees.

Explore more

Can Readers Tell Your Email Is AI-Written?

The Rise of the Robotic Inbox: Identifying AI in Your Emails The seemingly personal message that just landed in your inbox was likely crafted by an algorithm, and the subtle cues it contains are becoming easier for recipients to spot. As artificial intelligence becomes a cornerstone of digital marketing, the sheer volume of automated content has created a new challenge

AI Made Attention Cheap and Connection Priceless

The most profound impact of artificial intelligence has not been the automation of creation, but the subsequent inflation of attention, forcing a fundamental revaluation of what it means to be heard in a world filled with digital noise. As intelligent systems seamlessly integrate into every facet of digital life, the friction traditionally associated with producing and distributing content has all

Email Marketing Platforms – Review

The persistent, quiet power of the email inbox continues to defy predictions of its demise, anchoring itself as the central nervous system of modern digital communication strategies. This review will explore the evolution of these platforms, their key features, performance metrics, and the impact they have had on various business applications. The purpose of this review is to provide a

Trend Analysis: Sustainable E-commerce Logistics

The convenience of a world delivered to our doorstep has unboxed a complex environmental puzzle, one where every cardboard box and delivery van journey carries a hidden ecological price tag. The global e-commerce boom offers unparalleled choice but at a significant environmental cost, from carbon-intensive last-mile deliveries to mountains of single-use packaging. As consumers and regulators demand greater accountability for

BNPL Use Can Jeopardize Your Mortgage Approval

Introduction The seemingly harmless “pay in four” option at checkout could be the unexpected hurdle that stands between you and your dream home. As Buy Now, Pay Later (BNPL) services become a common feature of online shopping, many consumers are unaware of the potential consequences these small debts can have on major financial goals. This article explores the hidden risks