![]() The GC explained that she does not believe that the circumstances surrounding the proffer of an overly broad severance agreement matter because “an employer can have no legitimate interest in maintaining a facially unlawful provision in a severance agreement, much less an interest that somehow outweighs the Section 7 rights of employees.” This likely means that whether offered as part of a standard severance plan/policy, presented individually at the conclusion of an employee’s employment or negotiated as part of a settlement of claims, such provisions will be deemed unlawful by the GC.Įven if an employee does not sign the severance agreement containing a broad confidentiality and non-disparagement clause, the GC will still find that the employer engaged in unlawful activity by merely proffering the agreement itself. Proffering A Severance Agreement with “Overly Broad” Terms. In so doing the GC is clearly taking the position that many, if not most, typical confidentiality and non-disparagement provisions will be found to violate the Act. ![]() The GC couched this guidance by saying lawful severance agreements under the Act are limited to those that “do not have overly broad provisions that affect the rights of employees to engage with one another to improve their lot as employees.” As was discussed in the McLaren Macomb decision, the Memo goes on to opine that severance agreements may not prevent employees from engaging with the Board, their union, judicial or administrative or legislative forums, the media, or other third parties in furtherance of their Section 7 rights. In the Memo, while the GC stated clearly that severance agreements are not “banned” under the Act, it went on to take the position that such agreements cannot lawfully contain the standard types of confidentiality and non-disparagement clauses parties have commonly used for decades. Guidance from the GC on the McLaren Macomb Decision The Legality of Severance Agreements. In fact, in reading the GC’s Memo many employers may read it more as a warning than guidance as, in large part, it confirms the concerns employers had regarding the potential expansive impact of McLaren Macomb. The GC’s Memo reflects Abruzzo’s interest in dramatically expanding the boundaries of the Act’s coverage and employees’ rights under it, though the Board and ultimately the federal courts of appeals will decide whether Abruzzo’s more aggressive reading of McLaren Macomb is correct. ![]() Moreover, the Board found that the mere proffering of a severance agreement that conditions receipt of its benefits on compliance with such provisions is itself a violation of the Act, regardless of whether an employee actually accepts the terms and signs the agreement. In McLaren Macomb, as we discussed previously, the Board held that severance agreements that contain broad confidentiality and non-disparagement clauses are unlawful under the National Labor Relations Act (“Act” or “NLRA”) because the Board believes such clauses impermissibly infringe on employees’ rights under the Act. The GC’s Memo contains an FAQ in response to inquiries the NLRB has received about the McLaren Macomb decision and outlines Abruzzo’s plans for enforcement of the decision. 58, which left employers scrambling to decipher its unclear impact on both unionized and non-unionized workplaces, Jennifer Abruzzo, the General Counsel (“GC”) of the National Labor Relations Board (“NLRB” or “Board”) released guidance outlining her views on the decision’s implications and meaning in Memorandum GC 23-05 on March 22, 2023. Approximately a month after the Board issued McLaren Macomb, 372 NLRB No.
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