By Peter Moser March 28, 2023
On February 27 we issued a client alert discussing an important new NLRB decision, McLaren Macomb. The McLaren decision purports to significantly restrict an employer’s ability to include broad non-disparagement and confidentiality clauses in severance agreements. Earlier this week the NLRB’s General Counsel, Jennifer Abruzzo, issued a memo providing further guidance about the McLaren decision. Among the memo’s key takeaways, the General Counsel expresses her view that:
1) Supervisors, who are not covered by the National Labor Relations Act, are nevertheless included in McLaren’s new prohibitions (“. . . not only would it be violative for an employer to retaliate against a supervisor who refuses to proffer an unlawfully overbroad severance agreement, but I believe that an employer who proffers a severance agreement to a supervisor . . . could also be unlawfuI”).
2) The McLaren decision will be applied retroactively, and the normal 6-month limitation period applicable to unfair labor practice charges can be circumvented (“. . . this decision has retroactive application . . . Further, I believe that, while an unlawful proffer of a severance agreement may be subject to the six-month statute of limitation language under Section 10(b), maintaining and/or enforcing a previously entered severance agreement with unlawful provisions that restrict the exercise of Section 7 rights continues to be a violation and a charge . . . would not be time-barred”).
As we discussed in our original alert, employers will need to take into account the NLRB’s new position regarding severance agreement language, and decide for themselves how they wish to address it in their existing severance forms. The memo does confirm that severance agreements are lawful if not overly-broad. Careful drafting is important. HRW has created various language options for clients to consider, and we would be pleased to assist your organization in its analysis and implementation.
HRW will continue to monitor new developments regarding McLaren. The decision represents a major shift by the current NLRB, with significant implications for severance agreements. Notwithstanding, it remains to be seen whether the McLaren decision and its reasoning will withstand Supreme Court scrutiny on appeal, and how quickly and extensively the NLRB’s position will change in the event of a political change in administration.
For Questions/More Information
To discuss how the McLaren decision affects your organization, and for assistance in reviewing and revising your severance documents, please contact your HRW attorney or:
