NLRB puts confidentiality, nondisparagement provisions on shaky ground

On February 21, 2023, the National Labor Relations Board (NLRB) issued its decision in McLaren Macomb, ruling that severance agreements containing broad confidentiality or nondisparagement provisions prohibiting employees from making public statements about their employer or disclosing the terms of the agreement violate employees’ Section 7 rights under the National Labor Relations Act (NLRA), which allows employees to discuss the terms and conditions of employment. A month later, the NLRB general counsel issued a guidance memo further explaining her view on the scope and effect of the McLaren Macomb decision.

Guidance memo

The general counsel believes the McLaren Macomb decision has retroactive application, and her memo claimed the 6-month statute of limitations for an unfair labor practice may not apply because an unlawful provision may be a continuing violation. In other words, the general counsel believes employers that had former employees sign severance agreements months or years ago with overly broad confidentiality and nondisparagement agreements could still be subject to an unfair labor practice charge.

The memo also clarified that severance agreements are still, in fact, lawful and enforceable but noted that overly broad severance agreements beyond employment claims may be invalid.