There Are New Rules about Severance Agreements. Here’s What You Need to Know
There have been many questions raised about the implications and reach of a recent decision by the National Labor Relations Board to prohibit employers from requiring laid off workers to sign certain types of non-disparagement and confidentiality clauses if they want to receive severance.
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1. Who does the new prohibition apply to? Most US private sector employers are subject to NLRB’s authority and must abide by its decisions.
And its recent decision will apply both to their union and non-union workers.
“This board is signaling and reminding employers that the NLRB applies to employers regardless of whether workers are unionized,” said Andrew Herman, an associate in the labor & employment practice at law firm Blank Rome LLP.
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3. Is the ruling retroactive? That’s hard to say definitively. The decision the NLRB published does not explicitly say it’s retroactive, Herman noted.
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4. So can employers now never require me to stay mum about the company as a condition of receiving severance? No, they still can in some circumstances.
The NLRB’s decision last week prohibits employers from requiring laid off workers to keep confidential both the terms of their severance agreement and the terms and conditions of their job (which includes wages, hours, health and safety issues, etc.).
But your employer may still require that you not reveal trade secrets or other confidential information that protects their business interests, Herman noted.
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"There Are New Rules about Severance Agreements. Here’s What You Need to Know," by Jeanne Sahadi was published in CNN Business on February 26, 2023.