The National Labor Relations Board recently issued a decision stating that employers can no longer offer a furloughed employee severance in exchange for the employee signing a broad confidentiality or non-disparagement clause. The Board stated that conditioning such benefits has a tendency to interfere with or restrain the rights of employees to communicate with others about their employment, thereby violating Section 8(a)(1) of the National Labor Relations Act. You can find the NLRB’s decision from February 21, 2023, here.
There are two types of clauses in severance packages that might violate the act, as discussed by the order:
- Broad confidentiality clause requiring employee to keep the terms of the severance agreement quiet; and
- Broad non-disparagement clause that prohibits employee from discussing the terms and conditions of his employment with third parties.
“A severance agreement is unlawful if it precludes an employee from assisting coworkers with workplace issues concerning their employer, and from communicating with others, including a union, and the Board, about his employment,” the board wrote in its decision.
The ruling goes into effect immediately, so employers must review and revise their severance agreements to ensure they don’t include overly broad language that would restrict workers’ rights to communicate about their severance agreement and the terms and conditions of their employment.
If you have questions about how to comply with the NLRB’s order, please contact one of our employment law attorneys.