A Severance Agreement Can No Longer Silence Out-Going Employees

For years, confidentiality and non-disparagement clauses have been integral parts of any agreement where the employer agrees to pay the departing employee a severance. These types of provisions protect the employer on two fronts: first, as to confidentiality, the employer would not be subject to copy-cat claims or allegations from other employees who may suspect they are next to go and want use another employee's agreement to set a floor for negotiating their deal. Second, as to non-disparagement, the employee would be prevented from hanging dirty laundry in public and tarnishing the business and community reputation of the employer, while also pocketing severance pay.

Recently, during the Trump administration, the National Labor Relations Board ("NLRB") specifically approved these types of provisions as reasonable conditions to an agreement where the employer is paying a severance to the employee. In Baylor University Medical Center, 369 NLRB No. 43 (2020) and IGT