NLRB Upends Severance Agreement Rules Employers Routinely Live By

In a decision sure to drastically impact the labor and employment landscape, on February 21, 2023, the National Labor Relations Board (NLRB) held in McLaren Macomb, 372 NLRB No. 58 (2023), that an employer's mere proffer of a severance agreement containing broad confidentiality and nondisparagement provisions is unlawful.

Under the current Board's view, severance agreements are unlawful on their face if they contain terms with a "reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights" under the National Labor Relations Act (NLRA). As such, the NLRB will now examine severance agreements for language it deems to be too broad, coercive or tending to chill the exercise of employees' rights to collectively band together and communicate to try to improve the workplace. All employers (both union and nonunion) considering even presenting severance agreements to employees should now take appropriate action to assess