The Labor & Employment Blog provides employers with breaking news, insights, and legal analysis on the wide range of labor and employment issues facing employers and businesses. While the Blog provides a general summary of regulation updates, it is not intended to be, and should not be relied upon as, legal advice. The labor & employment attorneys at Chamberlain Hrdlicka stand ready to counsel employers on the issues they face.
Larry Carbo, Shareholder and Co-Chair
Diana Perez Gomez, Shareholder and Co-Chair
Julie Offerman, Shareholder
Kellen Scott, Shareholder
Leslie Tan, Senior Counsel
Elizabeth Feeney, Associate
AmyJo "AJ" Foreman, Associate
Chamberlain Hrdlicka Blawgs
Business and International Tax Blog
If you, like most employers, have included non-disparagement or confidentiality provisions in your severance and settlement agreements, you will be interested in a recent decision from the National Labor Relations Board (“NLRB”). On February 21, 2023, in a 4-1 decision the NLRB held an employer violates Section 8(a)(1) of the National Labor Relations Act (“NLRA”) when it offers a severance agreement with non-disparagement and confidentiality provisions that would restrict employees’ exercise of their NLRA rights. While some employers mistakenly believe the NLRA only applies to unionized employees, the NLRA covers most employees in the private sector, regardless of whether the workplace is unionized. However, the NLRA does not apply to (and the below NLRB decision does not affect) independent contractors, government employees, agricultural laborers, and supervisors (with limited exceptions), as those workers are not “employees” within the meaning of the NLRA.
The primary issue before the NLRB was whether the employer violated Section 8(a)(1) of the NLRA by offering a severance agreement that prohibited employees from making statements that could disparage or harm the image of the employer. The severance agreement also prohibited the employees from disclosing the terms of the severance agreements.
The NLRB concluded the non-disparagement and confidentiality provisions at issue interfered with, restrained, or coerced employees’ exercise of their Section 7 rights under the NLRA. Because the severance agreements conditioned the receipt of severance benefits on the employees’ acceptance of those unlawful provisions, the employer’s offer of the severance agreements to employees also violated Section 8(a)(1) of the NLRA.
The NLRB reasoned that public statements by employees about the workplace are central to the exercise of employee rights under the NLRA. According to the NLRB, the proscription would reasonably tend to prevent the employee from filing an unfair labor practice charge or assisting the NLRB’s investigation into the employer's use of the severance agreement.
There is still much left unanswered by this decision. We expect the NLRB General Counsel to issue guidance on what is and is not acceptable and we are continuing to monitor this matter. The NLRB opinion in McLaren Macomb and Local 40 RN Staff Council, Office and Professional Employees, International Union (OPEIU), AFL-CIO, Case 07-CA-263041 (“McLaren Macomb”) can be found here.
Chamberlain Hrdlicka’s Labor & Employment Group is available to answer any questions and assist with revising your separation and settlement agreements. Feel free to forward the Labor & Employment Alerts to others who might be interested. If you have questions, please send an e-mail or call.
AmyJo "AJ" Foreman is an associate in the litigation section. Her practice focuses primarily on commercial litigation, labor & employment, and appellate matters.
AJ graduated from the University of Houston Law Center where she was ...
- Senior Associate
Brittney Williams is a senior litigation associate whose practice primarily focuses on complex labor and employment, and commercial litigation. She provides a full range of labor and employment law services to her clients ...
Larry Carbo maintains a commercial litigation practice focusing on representation of companies in employment matters including misappropriation of trade secrets, enforcement and defense of non-competition agreements and ...
Diana Gomez is a talented trial attorney with extensive experience in civil lawsuits in state and federal courts. She focuses on complex labor and employment disputes by providing a full range of employment law services to her ...
Elizabeth "Liz" Feeney is an associate in the Commercial Litigation section, focusing primarily on labor and employment matters. She graduated from the SMU Dedman School of Law and began her career at a mid-sized firm in Fort Worth ...
Julie is an experienced litigation attorney in Chamberlain’s Houston office. She has substantial experience defending employers nationwide in wage and hour class and collective action lawsuits, including matters involving ...
Mr. Scott maintains a general civil litigation practice in state and federal courts, with particular emphasis on employment law, governmental defense, and civil rights.
His practice includes the defense of employers and ...
- Senior Counsel
Leslie Tan is an experienced attorney specializing in labor and employment matters and complex civil litigation. Ms. Tan enjoys guiding employers through challenging situations, from counseling on daily operations to ...