NLRB places new restrictions on severance agreements

The National Labor Relations Board (NLRB) recently decided McLaren Macomb, which relates to the structure and content of severance agreements and their enforceability under the National Labor Relations Act (NLRA). Section 7 of the NLRA applies regardless of whether you operate a unionized workplace. Read on to learn more about this decision.

Background

Over the years, the NLRB has taken various positions regarding what activities might “chill” an employee’s right to organize, with some directors being very narrow in their interpretation and others extremely expansive.

In evaluating whether language and severance agreements “chilled” these rights in 2020, the Board (in Baylor and IGT) looked at both the plain language of the agreement and added specific conditions that result in invalidating a severance agreement. This included some form of legal violation, such as unlawful termination, as well as demonstrating anti-union animus by the employer.

The Board recently reversed the 2020 additions with its ruling in McLaren, stating its intention to return to a “plain language” determination.

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