Last week, we published a news article explaining that National Labor Relations Board’s (“NLRB”) General Counsel (“GC”) Jennifer Abruzzo plans to release a guidance memo that will elaborate upon the NLRB’s decision in McLaren Macomb (“McLaren”). GC Abruzzo has now issued the guidance memorandum, in which she explains the decision’s scope and its practical impact.
Guidance Memorandum
The guidance memorandum is directed to the NLRB’s regional offices “to assist Regions in responding to inquiries from workers, employers, labor organizations, and the public about implications stemming from that case.”
The memorandum is structured in a question-and-answer format. The following responses are most noteworthy:
- The McLaren decision applies retroactively. The decision will apply retroactively, even to agreements proffered before the NLRB issued its decision on February 21, 2023. GC Abruzzo explains that while an unlawful proffer of a severance agreement may be subject to the six-month statute of limitations, maintaining a previous severance agreement with unlawful provisions would not be time-barred.
- Severance agreements are not prohibited. Lawful severance agreements may continue to be “proffered, maintained, and enforced” provided they do not contain “overly broad provisions that affect the rights of employees to engage with one another to improve their lot as employees.”
- Limited confidentiality and non-disparagement clauses may still be lawful. The memorandum states that narrowly-tailored confidentiality clauses that “restrict the dissemination of proprietary or trade secret information for a period of time based on legitimate business justifications” are lawful. However, a confidentiality clause is considered unlawful if it prevents employees from communicating with the NLRB, unions, legal forums, the media, or other third parties.
- Overly broad confidentiality or non-disparagement provisions are unlawful even if an employee requests them. Even in the “unlikely scenario” where an employee requests that an agreement include broad confidentiality or non-disparagement provisions, the provisions would still be unlawful because “the Board protects public rights that cannot be waived in a manner that prevents future exercise of those rights regardless of who initially raised the issue.”
- Agreements should not be found to be void in their entirety because they include unlawful provisions. The NLRB will generally seek to only void provisions it deems to be unlawful, rather than voiding the entire agreement, irrespective of whether there is a severability clause or not.
- Disclaimer language is not necessarily a cure-all. GC Abruzzo opined that “[w]hile savings clause of disclaimer language may be useful to resolve ambiguity over vague terms, they would not necessarily cure overly broad provisions.” However, she provides a “prophylactic statement of rights” that may be included in a severance agreement to try to mitigate the risk of including confidentiality and non-disparagement provisions.
Main Takeaway
While the guidance memorandum is merely GC Abruzzo’s opinion and not the law, it answers the questions of many employers and provides clear guidance on how the NLRB will apply and interpret the McLaren decision.
For more information on confidentiality, non-disparagement, and other provisions in severance agreements, please contact us at info@mnklawyers.com.
This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between MNK Law and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material.
