On February 21, 2023, the National Labor Relations Board (NLRB) returned to long-standing precedent that an employer may not offer severance conditioned on an employee’s agreement to broad nondisparagement and confidentiality provisions. Such an offer violates Section 7(a) of the National Labor Relations Act (NLRA), irrespective of whether the employee actually enters into the agreement.
The decision reflects a growing trend among federal and state authorities to curtail an employer’s ability to enter into agreements with employees containing confidentiality and nondisparagement provisions. The NLRB frequently reverses law upon the change of presidential political parties, and this decision is in line with the enumerated issues on which the current NLRB general counsel is seeking to return to law made or reestablished under the Obama-era NLRB.
Under Section 7 of the NLRA, an employee has the right to self-organize, join or assist labor organizations and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection. These “Section 7 rights” apply to union and nonunion employees alike, but certain workers – such as supervisory employees – are not covered by the NLRA and generally do not have Section 7 rights. Whether an employee is a supervisor for purposes of the NLRA is fact-dependent and based on the employee’s authority to hire, fire, discipline or responsibly direct the work of other...
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