The National Labor Relations Board (NLRB) has recently made a decision that will affect the way companies handle severance agreements with laid-off employees. Employers may no longer require employees to keep quiet about their termination as a condition of receiving severance pay, a report in CNN said.
Details of the Decision
The NLRB found that two common provisions in severance agreements violated employees’ rights under sections 7 and 8(a)(1) of the National Labor Relations Act. The first provision is a broadly written confidentiality clause that requires employees to keep the terms of their severance agreement confidential. The second provision is a broadly written non-disparagement clause that prohibits employees from discussing the terms and conditions of their employment with third parties.
The NLRB’s decision overturns a previous decision made by Trump-era NLRB members. The current decision makes it clear that severance agreements that contain these types of provisions are unlawful. Employers must review and, if necessary, revise their severance agreements to ensure that they comply with the NLRB’s decision.
Implications for Employers
Employers must now be careful when drafting severance agreements. They can no longer include broad confidentiality and non-disparagement clauses that restrict employees’ rights to communicate with others about their employment. Employers may still include confidentiality and non-disparagement clauses in their severance agreements, but they must be narrowly tailored to protect legitimate business interests.
Employers may also want to consider the potential impact of the NLRB’s decision on their ability to negotiate severance agreements with employees. Some employment attorneys believe that the decision could change the dynamics of severance negotiations. Employers may be less willing to offer severance pay if they cannot require employees to keep the terms of their termination confidential.
NLRB’s Decision: Protection on Employee’s Rights
The NLRB’s decision gives more power to employees by protecting their right to communicate with others about their employment. Employers must review their severance agreements to ensure that they comply with the NLRB’s decision. The decision may also affect the way employers negotiate severance agreements with employees. While the full impact of the decision remains to be seen, it is clear that companies can no longer silence laid-off employees in exchange for severance.