Severance agreements that are not overly broad are still OK, the National Labor Relations Board’s general counsel said in guidance issued Wednesday, in response to a February board decision.
On Feb. 21, the NLRB struck down a pair of decisions issued during the Trump administration and held that terminated employees cannot be prohibited in severance agreements from making disparaging statements about their former employer or disclosing the agreement’s terms.
In her guidance issued in response to the McLaren Macomb decision, NLRB General Counsel Jennifer A. Abruzzo says that “lawful severance agreements may continue to be proffered, maintained, and enforced if they do not have overly broad provisions that affect the rights of employees to engage with one another to improve their lot as employees,” including access to the NLRB, their union, judicial, administrative or legislative forums, the media or other third parties.
Among other advice, Ms. Abruzzo said it is irrelevant whether an employee actually signed the severance agreement in determining whether it violates the National Labor Relations Act, and the decision is presumed to be retroactive. Former employees are also protected under the ruling, she said.
The advice says narrowly tailored confidentiality clauses that are restricted to disseminating proprietary or trade secret information for a period of time that are based on legitimate business justifications may be considered lawful.