New NLRB Ruling Changes What Terms Private Sector Employers Can Include In Many Severance Agreements

On February 21, 2023, the National Labor Relations Board ("Board") issued a decision that could have broad-ranging implications on what terms a private sector employer may include in a severance or separation agreement for non-supervisory employees regardless of whether they are represented by a union. ¹ Unless struck down on appeal or read narrowly in the future, the Board's decision would appear to make it unlawful for most private sector employers to include standard confidentiality and non-disparagement language in severance agreements. The decision applies both to employees represented by a union and to those not so represented.

The facts of the Decision are straight-forward. The employer decided to permanently lay off a group of union workers. It offered a severance agreement to these employees. The employer made a number of mistakes applicable to union employers. It: (a) laid off the employees without notifying or bargaining with the union; (b) set the