Page 17 - BusinessWest May 1, 2023
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Case in Point
Decision Restricts on Non-Disparagement, Confidentiality Clauses
BY MARY JO KENNEDY and BRIANA DAWKINS
Arecent decision by the National Labor Relations Board (NLRB), McLaren Macomb, has employers in both union and non-union settings reviewing non-disparagement and confiden- tiality provisions used in their employee-separation agreements for possible legal challenges.
In February of this year, the NLRB held that the severance agree- ments at issue in McLaren Macomb violated the National Labor Relations Act. The employer, a hospital, offered severance agree- ments to union employees being furloughed that required them to waive certain rights under the act. The agreements included provi- sions that prohibited furloughed union employees from making state- ments that could disparage or harm the image of the hospital and prohibited employees from disclosing the terms of the agreement.
The NLRB found that those provisions were overly broad, unlaw- fully restrictive, and coercive on the employees’ ability to exercise their rights under Section 7 of the act. Section 7 protects the ability of employees and former employees to discuss terms and conditions of employment with co-workers. More broadly, Section 7 affords employees a wide range of protection, including communications with third parties “where the communication is related to an ongo- ing labor dispute and when the communication is not so disloyal, reckless, or maliciously untrue.”
The NLRB’s decision in McLaren Macomb makes clear that a severance agreement that has a reasonable tendency to interfere, restrain, or coerce the exercise of Section 7 rights by employees
is unlawful. An employer that proffers a severance agreement with provisions that would restrict employees’ exercise of their rights under the act may be found in violation of the act. The decision
states that it is immaterial whether an employee accepts the agree- ment. It remains uncertain whether any courts will uphold McLaren Macomb.
One month after issuance of the McLaren Macomb decision, the NLRB’s general counsel issued a guidance in response to inquiries about the McLaren Macomb decision, which responded to some inquiries regarding the decision’s impact. While not binding or con- trolling, some key points referenced in this guidance are:
• The McLaren Macomb decision applies to existing separation agreements. The general counsel suggests employers should pro- actively consider contacting those subject to severance agreements with overly board provisions in order to advise them that the provi- sions are null and void and that the employer will not seek to enforce the agreements or pursue any penalties;
• Because of the inequality of bargaining power between employ- ees and their employers, it is the role of the NLRB to act “in a public capacity to protect public rights to effectuate the public policy of the act.” Even if the employees agree to broad confidentiality or non-dis- paragement provisions, the rights of the public may not be waived in a way that precludes the future exercise of Section 7 rights;
• Provisions in any employer communication to employees that tend to interfere with, restrain, or coerce employees’ rights under Section 7, if not narrowly tailored, may also be prohibited under Sec- tion 7 of the act;
  • Confidentiality provisions that are narrowly tailored to restrict the disclosure of propri- etary or trade-secret information,
Clauses
Continued on page 18
MARY JO KENNEDY
BRIANNA DAWKINS
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