The National Labor Relations Board (NLRB or the Board) issued a decision on February 21 in McLaren Macomb (372 NLRB No. 58) overruling precedent to hold that employers may not offer employees severance agreements containing confidentiality or non-disparagement provisions. Employers, whether unionized or not, should take note of the NLRB’s new focus on restricting common language in severance agreements that the Board believes requires employees to waive their rights under the National Labor Relations Act.
Facts – McLaren’s Severance Agreement
McLaren Macomb (McLaren or the Employer) operated a hospital in Michigan where it employed union-represented service employees. [1] In June 2020, during the COVID-19 pandemic, McLaren permanently furloughed 11 employees responsible for greeting hospital visitors. [2] The Employer offered these employees a severance agreement providing for payments in exchange for a release of employment claims. [3] The severance agreements contained the following provisions that the NLRB General Counsel alleged were unlawful: [4]
Confidentiality Agreement: The Employee acknowledges that the terms of this Agreement are confidential and agrees not to disclose them to any third person, other than spouse, or as necessary to professional advisors for the purposes of obtaining legal counsel or tax advice, or unless legally compelled to do so by a court or administrative agency of competent jurisdiction.
Non-Disclosure: At all times...
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