The National Labor Relations Board (NLRB) has released a guidance memorandum clarifying its position on the use of confidentiality and non-disparagement provisions in employer settlement agreements.
As discussed here, the NLRB’s late February decision in the matter McLaren Macomb reversed the agencies prior precedent on an employer’s use of confidentially and non-disparagement provisions in severance agreements. The decision created confusion among employers seeking to comply with the newly restrictive mandates including whether the use of a comprehensive disclaimer would insulate an employer from liability.
The agencies memorandum offers guidance on the scope and effect of the McLaren Macomb decision including the retroactive effect of the decision and its application to supervisors. Guidance is also provided regarding the kinds of severance agreement provisions that could violate the National Labor Relations Act (NLRA) if offered, maintained, or enforced, including confidentiality, non-disclosure, and non-disparagement, among others. Key provisions of the memo include:
- Confirmation that the decision is to be applied retroactively.
- The recommendation that maintaining and/or enforcing a previously signed severance agreement containing unlawful provisions should be considered a continuing violation warranting waiver of the NLRA’s six-month statute of limitations period.
- Regardless of whether an agreement contains a severability clause or not, typically the unlawful provisions, as opposed to the entire agreement will be voided.1
Employers concerned about the retroactive application of this decision are encouraged to seek legal counsel.
1.Such a decision will always be considered based on facts specific to the matter before the NLRB