NLRB finds nondisparagement, confidentiality clauses violate NLRA

In a recent decision, the National Labor Relations Board (NLRB) under President Joe Biden reversed two decisions issued by the Trump Board that had permitted fairly broad confidentiality and nondisparagement provisions in severance agreements offered to employees—union and nonunion alike. Let’s take a closer look at the Board’s recent decision.

Background

The NLRB, which is tasked with enforcing the National Labor Relations Act (NLRA), consists of five members appointed by the president with the consent of the Senate to 5-year terms. One member’s term expires each year. As their tenures expire, the president makes replacement selections based on party affiliation and, by convention, the Board consists of three members of the president’s political party and two members of the opposition party.

The selection process more and more frequently results in the Board reversing course on issues when presidential administrations change. Although there’s a misconception that the NLRA applies only to employers with unions, it actually applies to all employers, regardless of whether their employees are represented by a union.

Trump Board’s decisions

In 2020, the Board determined the NLRA didn’t prohibit employers from including in severance agreements confidentiality and nondisparagement provisions or provisions prohibiting employees from participating in claims filed by others against the employer.