NLRB's Severance Ruling Has Broad Implications for Employers
In the aftermath of the #MeToo movement, employers have had to grapple with state and federal efforts to limit the use of non-disclosure agreements, particularly in the context of sexual harassment.
Now, businesses and other organizations must confront a recent ruling from the National Labor Relations Board that determined the severance agreements offered by a Michigan hospital were unlawful because of the confidentiality and non-disparagement provisions they included.
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Andrew Herman, a Blank Rome labor and employment attorney, said the NLRB indicated that a release “waiving only the signing employee’s rights to pursue employment claims arising as of the date severance agreement would be permissible.”
“That should provide employers a degree of comfort that severance agreements can continue to be used to provide finality when separating employees,” Herman said in a statement.
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Herman of Blank Rome noted that the general counsel for the NLRB has traditionally allowed confidentiality around the financial terms of a settlement agreement, which he said are often the most sensitive part of a settlement or severance agreement.
“If an employee can still agree to confidentiality regarding the amount of a severance payment and other severance benefits, that may limit the practical impact of the McLaren decision,” Herman said.
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"NLRB's Severance Ruling Has Broad Implications for Employers," by Lyle Moran was published in Legal Dive on February 28, 2023.