Blog » NLRB Nixes Use of Non-Disparagement Clause in Severance Agreement

NLRB Nixes Use of Non-Disparagement Clause in Severance Agreement

By Lisa F. Harper, Esq.

Yesterday, February 21, 2023, the National Labor Relations Board (the “NLRB”) held that a non- disparagement clause contained in a severance agreement violated the National Labor Relations Act (‘NLRA” ) in NLRB v. Macomb, et al. See,

McLaren Macomb had offered severance agreements to furloughed employees that contained a non-disparagement clause that prohibited those employees from making “statements to [ Macomb’s] employees or to the general public which could disparage or harm the image of Employer, its parent and affiliated entities and their officers, directors, employees, agents and representatives”

The NLRB held that “[t]he nondisparagement provision on its face substantially interferes with employees’ Section 7 rights.” The Board further held that the act of offering such agreements to employees, whether ultimately signed or not, was illegal.

In ruling in this way, the Board returned to a prior standard with respect to its consideration of severance agreement clauses, noting the policies behind its decision that,

Section 7 rights are not limited to discussions with coworkers, as they do not depend on the existence of an employment relationship between the employee and the employer, and the Board has repeatedly affirmed that such rights extend to former employees. It is further long-established that Section 7 protections extend to employee efforts to improve terms and conditions of employment or otherwise improve their lot as employees through channels outside the immediate employee employer relationship. These channels include administrative, judicial, legislative, and political forums, newspapers, the media, social media, and communications to the public that are part of and related to an ongoing labor dispute. Accordingly, Section 7 affords protection for employees who engage in communications with a wide range of third parties in circumstances where the communication is related to an ongoing labor dispute and when the communication is not so disloyal, reckless, or maliciously untrue to lose the Act's protection.

NLRB v. McLaren Macomb et al., Case 07–CA–263041 (Feb. 21, 2023)(citations omitted)(emphasis supplied).

Given this decision, employers should carefully consider whether and how to use non-disparagement clauses in their severance agreements.

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