NLRB rules overbroad employee severance agreements violate the NLRA

In a recent ruling, the National Labor Relations Board (NLRB) found an employer violated the National Labor Relations Act (NLRA) when it offered furloughed employees a severance agreement that included overbroad nondisparagement and confidentiality provisions.

The facts

Under a newly issued decision from the NLRB, “an employer violates Section 8(a)(1) of the Act when it proffers a severance agreement with provisions that would restrict employees’ exercise of their NLRA rights.” The Board continued that an agreement such as this violates Section 7 rights of the NLRA.

At issue in this case were 11 severance agreements offered by a Michigan hospital, called McLaren Macomb, to a group of employees who were furloughed when COVID-19 rendered their jobs nonessential.

The employees greeted patients arriving at the hospital’s surgery center, but during the height of the COVID-19 pandemic, the hospital stopped performing elective and outpatient surgeries and instead focused on trauma, emergency, and COVID-19 patients. The furloughed employees were all represented by a union.

Without consulting that union, the hospital offered each furloughed employee a severance agreement that provided: