In February 2023, the National Labor Relations Board (the "NLRB") issued a decision, McLaren Macomb, 372 NLRB No. 58, that impacts the use of routine confidentiality and non-disparagement provisions common in many separation agreements. Notably, this decision applies to any employees and employers who are covered by the National Labor Relations Act in the private sector, whether or not the employees are represented by a union.
In McLaren Macomb, the NLRB found that broad confidentiality and non-disparagement provisions are unenforceable and that they violate the National Labor Relations Act (the "Act") because they restrict employee rights to engage in protected, concerted activity related to the terms and conditions of employment (or former employment). For example, such provisions limit employees' ability to discuss terms and conditions of employment with other employees and also restrict their right to file an unfair labor practice charge with the NLRB or to assist the NLRB in an investigation.
Similarly, non-disparagement provisions often limit an employee's ability to express their views about the employer to a third party in an effort to seek assistance or to assist coworkers, including in connection with an NLRB investigation or litigation of unfair labor practices. For these reasons, the NLRB held that the non-disparagement provision in McLaren Macomb violated the Act, and offering a severance agreement with such terms was an unfair labor practice.
In March 2023, the NLRB's General Counsel issued a memorandum regarding the McLaren Macomb decision, stating that an employer's efforts to enforce past agreements containing such broad confidentiality and non-disparagement provisions would be considered unlawful.
Note that in most situations, agreements that apply to supervisors will not be impacted because supervisors are excluded from coverage under the Act.
In light of these developments, employers should review carefully any separation agreements offered to covered employees which reference confidentiality and non-disparagement. Note that there may be ways to draft confidentiality and non-disparagement requirements more narrowly to protect the employer's legitimate interests while not limiting employee rights under the Act. When in doubt, seek the assistance of your labor and employment counsel to help you navigate these shifting sands.