We recently reported on the National Labor Relations Board's McLaren Macomb decision, which held that employers commit an unfair labor practice by merely proffering a severance agreement including broad confidentiality and non-disparagement clauses, regardless of whether the employee actually signs the agreement. The Board's General Counsel ("GC") has now issued a Guidance Memorandum explaining her position regarding severance agreements in the wake of McLaren Macomb. These are the highlights from the Memo:
- The Memo recommends that any confidentiality provision only restrict the dissemination of trade secrets for a limited period of time, and that any non-disparagement provision be limited to prohibiting defamation.
- A savings clause or disclaimer does not remedy overly broad confidentiality and non-disparagement provisions unless it spells out all of the employee's rights under the National Labor Relations Act (the "Act"), which is simply not practical.
- The decision applies retroactively. While offering an unlawful severance agreement is subject to a six-month statute of limitations, the GC believes that an employer's efforts to enforce overly broad confidentiality and non-disparagement clauses in agreements even more than six months old violates the Act.
- An employer's tender to a supervisor of a severance agreement could be unlawful if it prevents the supervisor from undertaking certain conduct related to employees' Section 7 activity, such as testifying adverse to the employer in a Board proceeding or grievance process. However, these situations would be rare in non-unionized workplaces.
- The GC suggests that employers consider contacting employees subject to broad confidentiality and non-disparagement provisions in previously signed agreements to notify them that these provisions are null and void. Commentators have immediately derided this suggestion, particularly since the Memo indicates that the remedy for a violation may only be striking the invalid portions of an agreement.
- The GC believes that non-competition and non-solicitation clauses, which were not at issue in McLaren Macomb, may violate Section 7 of the Act.
Contact Liskow's employment law team for advice and assistance in reviewing your company's existing severance agreements and navigating issues raised by McLaren Macomb and the GC's Guidance Memo.
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