The National Labor Relations Board has reaffirmed its McLaren Macomb standard, signaling that severance agreements containing overly broad provisions remain a significant area of…
The National Labor Relations Board has reaffirmed its McLaren Macomb standard, signaling that severance agreements containing overly broad provisions remain a significant area of enforcement risk for employers. Under this reaffirmation, the Board has made clear that the mere offer of a severance agreement with unlawful terms can violate Section 8(a)(1) of the National Labor Relations Act, regardless of whether the affected employee actually signs the agreement or is coerced into doing so. The focus is on the chilling effect such provisions have on employees' exercise of their Section 7 rights, which protect concerted activity for mutual aid and protection.
Three categories of provisions are drawing particular scrutiny. Non-disparagement clauses that broadly restrict employees from making negative statements about the employer, its officers, or its practices may be deemed unlawful because they discourage employees from filing charges, communicating with the Board, or speaking with coworkers and the public about workplace concerns. Restrictions on contact with coworkers can similarly impede protected concerted activity, including discussions about wages, working conditions, and union organizing. Confidentiality provisions that bar disclosure of the agreement's terms are presumptively unlawful where they prevent employees from discussing the agreement with other workers, union representatives, or government agencies.
The Board has indicated that such provisions are not per se prohibited but must be narrowly tailored to serve legitimate employer interests. Sweeping language untethered to specific, lawful objectives is unlikely to survive review. Employers should therefore conduct a prompt audit of existing severance templates, separation agreements, and related release documents to identify provisions that may run afoul of the standard. Problematic language should be narrowed to the minimum scope necessary, and employers should consider incorporating express NLRA savings clauses that preserve employees' rights to engage in protected activity, communicate with the Board, and discuss terms and conditions of employment.
Taking these steps now can meaningfully reduce exposure to unfair labor practice charges and the reputational and financial consequences that may follow Board findings of liability.
This article is intended for general informational purposes only and does not constitute legal advice. Clients should consult qualified counsel for guidance tailored to their specific circumstances.