If your company lays you off, your employer might offer you severance pay — but only if you agree to adhere to a number of restrictions.
Staying quiet is often one of them.
But the National Labor Relations Board this week put employers on notice that they can no longer silence laid-off employees in two very specific ways that the board says violates employees’ rights under sections 7 and 8(a)(1) of the National Labor Relations Act.
Employers can no longer include a broadly written confidentiality clause that requires you to keep mum about the terms of your severance agreement. And they can no longer include a broadly written non-disparagement clause that prohibits you from discussing the terms and conditions of your employment with third parties.
“A severance agreement is unlawful if it precludes an employee from assisting coworkers with workplace issues concerning their employer, and from communicating with others, including a union, and the Board, about his employment,” the board wrote in its decision Tuesday.
The ruling is a reversal of what the Trump-era NLRB members had decided in a prior case were lawful restrictions on employees as a condition of receiving severance.
With the exception of railroads and airlines, US business employers are subject to the NLRB’s authority.
While the labor board’s ruling this week could be appealed, the ruling is effective immediately. That means employers must review — and, if necessary, revise — their severance agreements to ensure they don’t include overly broad language that would restrict workers’ rights in the two ways the board ruling indicates.
The board’s decision will give back a bit of power to employees, but how it plays out remains to be seen.
“Companies are definitely incentivized to silence their departing employees…[because it helps them keep] all the skeletons in the closet,” employment attorney Alex Granovsky told CNN via email.
“This decision opens the door. While on the one hand sunlight is the best medicine, and greater exposure should lead to better companies, this decision could also change the dynamics of a severance negotiation.”
– CNN’s Chris Isidore contribute to this report
SentientCrisis on February 23rd, 2023 at 19:22 UTC »
I had an employer who sold the business to another company. They sent us all severance agreements. We wouldn’t get paid unless we signed the agreement which included an NDA. My agreement also included something like: If you choose to file for unemployment, we won’t deny it. So I filed for unemployment.
A few weeks later I got an angry call from the former CEO. “Why did you file for unemployment?! You have to undo it!” I was genuinely confused and said that it was in my agreement. They checked and realized that they had sent me the wrong agreement. I was an independent contractor so I shouldn’t have been able to file.
They fought it and it went to a hearing. After the hearing, the court found that not only had I been managed like an employee but that the company had been committing fraud by hiring people as independent contractors instead of employees and then operating as if they were employees.
ChaotiCait on February 23rd, 2023 at 13:38 UTC »
This headline is extremely misleading. The actual notice from the NLRB is not nearly so broad. From the article:
Edit: See comment below, after actually reading the NLRB decision (as opposed to just the article), the NLRB decision is actually extremely broad.
veotrade on February 23rd, 2023 at 12:38 UTC »
I’m not sure why ex employees were ever afraid to spill the beans on bad companies. As doing so anonymously was always an option.
But good news nonetheless.