NLRB Invalidates Non-Disparagement and Confidentiality Provisions in Separation Agreements

For those of you who think that this blog doesn’t apply to you because your employees are not unionized, think again!  A common misconception shared by many employers and HR professionals is that because they work in a non-unionized workplace, the restrictions of the National Labor Relations Act-NLRA (and the related pronouncements of the National Labor Relations Board-NLRB) are inapplicable.  Wrong!

All employers, both unionized and non-unionized, are covered by the NLRA.  To the extent that the NLRB determines that certain employment policies or practices violate the NLRA, those policies and practices are impermissible for all employers (not just unionized employers).

Case in point is the NLRB’s recent decision in McLaren Macomb.  In this decision, the NLRB held that certain standard provisions in Separation Agreements constitute unfair labor practices by impermissibly limiting and coercing employees in the exercise of their Section 7 rights to engage in protected concerted activities and therefore violate the NLRA.  Specifically, the NLRB held that overly broad and one-sided non-disparagement clauses (whereby the employee promises not to make any disparaging or negative comments about the employer subsequent to termination) are impermissible pursuant to the NLRA.  Likewise, the Board concluded that overly broad and restrictive confidentiality provisions (whereby the employee agrees to keep the existence and terms of the Separation Agreement confidential) are also unlawful.

Putting aside for now whether Mclaren Macomb will survive appeal or whether court challenges to the decision will eventually eviscerate it, for now, employers have to carefully review all future Separation Agreements provided to terminated employees.  To the extent that the standard agreement used by the employer includes these provisions, the agreement will need to be revised.  Compliance with McLaren Macomb does not necessarily require employers to delete these standard provisions, however, these provisions will need to be modified to avoid potential ULP liability to the employee.

For questions about the legality of your Separation Agreements or any other labor and employment law topic, please do not hesitate to contact the attorneys at Hoffman & Hlavac.  To stay updated on key labor and employment law developments that affect your workplace, be sure to subscribe to this blog and follow us on social media!