32 MAY / JUNE 2023 Debra A. Mastrian Partner Amundsen Davis LLC DMastrian@ AmundsenDavisLaw. com Amundsen Davis LLC is a Diamond Associate Member of the Indiana Bankers Association. HUMAN RESOURCES Private employers need to, once again, review and update their severance agreements in light of a recent decision by the National Labor Relations Board (the Board) in McLaren Macomb, 372 NLRB No. 58 (February 21, 2023).1 In McLaren, the Board reversed decisions issued in 2020 during the Trump administration (which allowed severance agreements with broad non-disparagement and confidentiality provisions) and returned to prior precedent, finding that overly broad non-disparagement and confidentiality provisions interfere with an employee’s rights under the National Labor Relations Act (the Act). The Board is concerned that such broad provisions may discourage employees from discussing the terms and conditions of their employment or their employer in general. Section 7 of the Act gives most private sector (both union and non-union) employees the right to, among other things, engage in “protected concerted activities” relating to wages, hours or other terms and conditions of employment for the purposes of “mutual aid or protection.” Protected activities include complaints, protests or voicing of concerns. Not all employees are covered. Executives and supervisors (as defined under the Act) are not entitled to Section 7 rights. Section 8 of the Act makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the Act. In McLaren, the Board found that the mere act of offering a severance agreement with overly broad terms (terms that have a “reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights”) is an unfair labor practice. This Time To Update Severance Agreements New NLRB decision makes previously lawful agreements unlawful is true regardless of the employer’s intent or motive and whether the employee signs the agreement. Moreover, having a savings clause or disclaimer that states that nothing in the agreement is intended to interfere with the employee’s rights under the Act does not cure overly broad provisions. The severance agreements in McLaren contained standard confidentiality and non-disparagement clauses that broadly prohibited the employees from, among other things, (1) disclosing the terms of the agreement “to any third party” other than a spouse, attorney or provisional advisor or unless compelled by law; (2) making statements to the employer’s employees or general public that could disparage or harm the image or reputation of the employer or its affiliates and their officers, directors, employees, agents and representatives; and (3) disclosing information or knowledge learned during their employment. The Board found that the confidentiality provision was unlawful because it was not narrowly tailored to the employer’s non-public proprietary or trade secret information and did not make it clear that the employees had the right to disclose the terms to the Board investigators or former employees who were offered similar agreements. The Board found that the non-disparagement clause was overly broad, in part, because it was not limited to matters regarding past employment with the employer, it did not exclude statements asserting that the employer violated the Act, and it did not exclude efforts to help other employees which would include future cooperation with a Board investigation or litigation of an unfair labor practice under the Act. A non-disparagement provision should make it clear
RkJQdWJsaXNoZXIy MTg3NDExNQ==