The NLRB this week once again ruled that a relatively common employment practice violated federal labor law, continuing what some are seeing as a trend under the current administration. This time, the NLRB ruled that it was illegal for an employer to offer employees a severance agreement that prohibited them from making disparaging statements about the employer and from disclosing the terms of the severance agreement itself. McLaren Macomb, 372 NLRB No. 58 (February 21, 2023)

The NLRB explained in its ruling that the non-disparagement and confidentiality provisions before it served as an attempt to deter employees from exercising their statutory rights. The NLRB’s decision came from its current Democratic majority, and it marked a stark reversal from two contrary rulings issued during 2020 by the then-Republican majority.

The McLaren Macomb case involved a hospital in Michigan where eleven union-represented employees were offered severance agreements as part of a furlough program. The employees all signed the severance agreements, and their union subsequently challenged the legality of those agreements on a number of grounds.

The NLRB’s decision in McLaren Macomb involved its analysis of specific non-disparagement and confidentiality provisions, and it remains to be seen whether the decision will be applied more broadly, just as it remains to be seen whether the decision will face a federal appeals court challenge.

If you have questions about this or other Labor and Employment issues, contact Brian Kelly or another member of the Frantz Ward Labor and Employment Practice Group.