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NLRB General Counsel Interprets McLaren Macomb Decision

The NLRB General Counsel has issued a guidance Memorandum interpreting and answering questions about the landmark McLaren Macomb decision, which ruled that broad non-disparagement and confidentiality provisions in severance agreements are unfair labor practices. Below is a quick list of key points from the Memorandum:

  • Severance agreements that contain a waiver of employee rights to pursue claims arising up to the date of the severance agreement are not unlawful unless they contain overly broad non-disclosure, confidentiality or other provisions that restrict employee Section 7 rights.
  • Non-disclosure and confidentiality provisions are to be evaluated on their face, and there is no balancing of employer interests or examination of the circumstances.
  • Overbroad provisions are unlawful when offered. Whether the employee signs or refuses to sign is irrelevant.
  • Overbroad provisions requested from supervisors are unlawful if the offer is related to retaliation for participation in NLRB proceedings or for attempting to assist employees to assert their Section 7 rights.
  • The McLaren Macomb decision is retroactive and applies to any attempt to enforce overbroad provisions entered into before the date of the decision.  Employers are "encouraged" to notify past employees that these provisions in past agreements are void.
  • If overbroad provisions are challenged, the finding of an unfair labor practice does not necessarily void the rest of the severance agreement.
  • Overbroad provisions are unlawful even if employees request them.
  • McLaren Macomb applies to not just severance agreements, but also to other employment documents, such as offer letters, employment contracts and communications with employees.
  • Confidentiality provisions that are narrowly tailored to protect employer confidential information and trade secrets are lawful.
  • Non-disparagement provisions that are narrowly tailored to prohibit defamatory statements that are malicious and false are lawful.
  • Simple disclaimers or savings clauses may not save overbroad confidentiality and non-disclosure provisions from being unlawful.  
  • The GC memo suggests model language that might be used to exclude Section 7 rights from confidentiality and non-disclosure provisions so that these terms are not unlawful.  
  • The GC "believes" that some other common terms in severance agreements may also be unlawful limitations of Section 7 rights, including: non-compete agreements, non-solicitation clauses, covenants not to sue, no-poaching clauses and overbroad liability releases.
Jennifer Abruzzo, general council at the National Labor Relations Board (NLRB), on March 22 sent a memo to the agency's field offices about the January 5 ruling, which blocked companies from preventing workers from leaving for a competitor after their employment, starting a competing business, or talking negatively about the organization. According to the memo from Abruzzo, the NLRB views the January ruling as retroactive.  Going forward, the memo says, "maintaining and/or enforcing a previously entered severance agreement with unlawful provisions that restrict the exercise of Section 7 rights continues to be a violation." In other words, agreements with such clauses made before the January 5 ruling are still considered unlawful.


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