The National Labor Relations Board (NLRB) recently issued a decision that requires all union employers to pay attention to how they deal with departing employees regarding the terms to include, or more importantly, not to include, in severance agreements or separation packages. This ruling affects employees who leave voluntarily or are terminated. Although this ruling was issued in the context of the layoff of union employees, the ruling is broad enough to apply to employers without a union shop. Here’s what you need to know about the decision, its potential impact on non-union employers, and what you can do to avoid legal entanglements in this area. 

In McLaren Macomb and Local 40 RN Staff Council, eleven furloughed hospital workers were offered severance agreements that would have prohibited them from both making disparaging statements about their former employers and from talking about the terms of the settlements. Upon review, a majority of the NLRB ruled that such provisions violated section 7 of the National Labor Relations Act (NRLA) regarding interfering with employee rights. Section 7 of the NRLA includes the right to engage in protected concerted activities concerning wages, hours, and other terms and conditions of employment, with or without the involvement of a union. The board then went on to state that employees may not waive their rights under the NRLA. 

Although the case dealt with union employees whose employments were terminated, the case should not be considered to apply only to union employers. In fact, in a previous court case ruling, the Board stated, “there can be little doubt that the protection afforded to concerted activities under the NLRA applies equally to workers in unionized or in non-unionized firms.” Non-union employers, then, should consider the message they want to convey when an employee is discharged or laid off, and take those steps necessary to make the employee comfortable with the employer’s decision and the severance package being offered and negotiated. 

Employers – union and non-union –  who use such confidentiality agreements or non disparagement clauses in severance agreements need to review this ruling carefully. This ruling may predict a wider trend against these kinds of additions to severance agreements. In addition, a severance agreement should clearly indicate that by signing the agreement the employee does not give up the right to file a charge with the NLRB, or to assist others in filing or pursuing charges with the NLRB. 

It is possible that this ruling may be appealed. Still, employers should think carefully before including either a nondisparagement or a confidentiality provision in any separation agreement. If your organization has used or continues to use these kinds of provisions in contracts, seek legal advice to ensure that you are not currently running afoul of any regulations. Further, it is important to seek guidance on whether or not additional revisions to your severance agreements or other contracts may be necessary to avoid future litigation.