As discussed in our blog here, in February the National Labor Relations Board issued the McLaren Macomb decision prohibiting employers from “tendering” to employees separation or severance agreements that require employees to broadly waive their rights under the National Labor Relations Act.
Then, on March 22, the NLRB General Counsel Jennifer Abruzzo issued guidance addressing some of the outstanding questions that employers have been grappling with in the wake of McLaren.
GC Abruzzo issued the Guidance to assist NLRB Regional Directors, Officers-In-Charge, and Resident Officers in addressing McLaren‘s holding. While the GC guidance is not binding or controlling law, it is helpful for understanding how the Regions might prosecute matters post-McLaren, as well as how the Board might enforce the decision. Of course, it remains to be seen how courts will interpret McLaren.
Here’s a summary of the GC Guidance:
- McLaren applies retroactively. According to the Guidance, agreements proffered to employees prior to the February decision may be subject to challenge.
- In GC Abruzzo’s view, McLaren could apply to agreements with supervisors. The Guidance restates the established rule that the Act does not protect supervisors unless they oppose conduct prohibited by the Act, so an agreement with a supervisor or higher level employee could include provisions barred by McLaren. This is not new.
But what is somewhat new, however, is Abruzzo’s opinion that “an employer who proffers a severance agreement to a supervisor in connection with Parker-Robb Chevrolet-related conduct, such as preventing the supervisor from participating in a Board proceeding, could also be unlawful.” Given this position, if a supervisor has opposed conduct that may be prohibited by the Act, such as objecting to an employer requirement that line employees sign broad confidentiality agreements, prudence suggests that any agreement offered to that supervisor should have strong Section 7 carve outs and limited confidentiality and non-disparagement covenants similar to line employee agreements post-McLaren.
- Severance agreements are not prohibited, even if they prohibit defamatory conduct, so long as they do not have “overly broad provisions that affect the rights of employees to engage with one another to improve their lot as employees.” This is not surprising. Lawful severance agreements may continue to be proffered, maintained and enforced as long as they do not contain overly broad provisions limiting the rights of employees to engage with one another for their mutual benefit relating to terms and conditions of employment.
Additionally, the Guidance explains that certain kinds of non-disparagement provisions are permissible. Non-disparagement provisions that are “limited to employee statements about the employer that meet the definition of defamation as being maliciously untrue, such that they are made with knowledge of their falsity or with reckless disregard for their truth or falsity” are allowed.
- A savings clause or disclaimer language won’t necessarily save overly broad provisions, but may help explain the agreement’s restrictions. The Guidance says that though specific savings clause or disclaimer language may be useful to resolve ambiguity over vague terms, such clauses won’t necessarily cure overly broad provisions.
The Guidance includes a model savings clause that is a detailed and lengthy description of nine specific protected activities. The most conservative approach would be to conform Section 7 carve outs to this “prophylactic statement of rights,” but since the Guidance is not absolute, and companies’ appetite for risk varies, employers should consult with counsel to find the best language and approach for their company.
- Severability clauses may not be necessary, but we still recommend them. According to the Guidance, the NLRB Regions generally will make decisions based solely on the unlawful provisions and will seek to have individual provisions voided as opposed to entire agreements–regardless of whether the agreements contain a severability clause. Though not required in GC Abruzzo’s view, severability clauses certainly can’t hurt.
- Interestingly, the Guidance says that employees who want confidentiality or non-disparagement protections in a separation agreement also may not seek or request prohibited confidentiality or non-disparagement provisions. So even if an employee negotiates for broad and mutual confidentiality and non-disparagement language, employers could still violate the law by agreeing to include such language in an agreement.
As shared in our previous post discussing McLaren, your approach will depend on the type of workforce you have, your risk tolerance, and what you are trying to protect. We are standing by, ready to assist, should you need further guidance.