New NLRB Ground Rules for Severance Agreements Mixed Bag, Lawyer Says
The National Labor Relations Board threw in-house attorneys and employment lawyers a curve ball with its latest memorandum.
In the new guidance, NLRB General Counsel Jennifer Abruzzo said offering severance agreements that require employees to waive their rights, especially their right to discuss potentially unfair labor practices, will be considered a labor law violation.
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Employment lawyers are watching closely. One of them, Blank Rome associate Andrew Herman, talked with Corporate Counsel about what the memo means for employers.
“[Abruzzo] has made it known she is looking to overturn a number of precedents set during the Trump administration,” Herman said. “She’s giving a warning to employers about how expansively she views the reach of that decision.”
Corporate Counsel: NLRB General Counsel Jennifer Abruzzo’s memo frames this policy as a return to previous precedent. What do you think?
Andrew Herman: In large part, it is a return to prior precedent. The main difference here is in the context. This is occurring when there is a fair amount of public focus on layoffs and severance agreements.
The other aspect of this is that the general counsel is indicating that she may pursue enforcement of the NLRA with respect to non-compete agreements, which follows recent regulatory activity by the FTC. From a legal standpoint, it’s in large part a return to prior precedent, but the conversation about the implication of the law has shifted.
CC: How should in-house counsel be acting? What should they be doing right now in the context of that case and in the context of this memo?
AH: As many employers and in-house counsel have started to do, they should be reviewing their severance agreements, particularly with respect to confidentiality as to the terms of the agreement, as well as making sure that confidentiality as to proprietary or trade secret information is properly protected. They should also be looking at the non-disparagement provisions in their agreements.
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"New NLRB Ground Rules for Severance Agreements Mixed Bag, Lawyer Says," by Hugo Guzman was published in Corporate Counsel on April 3, 2023.