NLRB places NDAs with rank-and-file employees in its cross-hairs

On February 21, 2023, the National Labor Relations Board (NLRB) made a broadside attack on precedent, confidentiality, and nondisparagement provisions in severance agreements signed by rank-and-file employees. The far-reaching decision calls into question the enforceability of standard severance and employment agreement provisions entered into with statutory employees going forward.

Facts

When the federal government disallowed McLaren Macomb Hospital from employing nonessential employees in 2019, the hospital fired 11 union-represented employees (who were employed as greeters) and presented each with a severance agreement, which each of them signed. The agreements contained provisions the NLRB found “broadly prohibit[ed] disparagement of [McLaren] and requir[ed] confidentiality about the terms of the agreement.”

The specific provisions at issue were as follows: