March 6, 2023
Last week, the National Labor Relations Board (NLRB) held that employers can no longer use broad nondisparagement clauses in severance agreements to prevent laid-off employees from talking about their work or criticizing their former employers.
On February 21, the board explained in its Macomb and Local 40 RN Staff Counsel, Case No. 07-CA-263041, that offering employees a severance agreement that requires them to broadly give up their rights under the National Labor Relations Act (NLRA) is unlawful. Macomb involved a Michigan hospital that, in the middle of the COVID-19 pandemic, terminated 11 union employees. The hospital required them, in exchange for a payment, to sign severance agreements barring them from making public comments that “could disparage or harm” the company.
The NLRB’s decision reversed two prior 2020 decisions holding that such severance agreements were lawful. The NLRB decision could be significant and employers are strongly advised to consult with their counsel before entering into severance agreements in the future.
If you have questions regarding this or any other matter, please contact Dean Leazenby at Warrick & Boyn, LLP.