Important Developments Regarding Separation Agreements
By Brian Goodman, Attorney
The National Labor Relations Act (NLRA) protects the rights of employees to organize and bargain regarding certain workplace issues. Some of these protections extend to employees who work in non-unionized workforces. For example, under Section 7 of the NLRA, employees who are not supervisors/managers (including non-union employees) have the right to engage in concerted activities for the purpose of collective bargaining or "other mutual aid or protection." This generally provides employees the right to discuss or act as a group, to discuss or act on behalf of a group, and to address the terms and conditions of their employment. Employee conduct is "concerted" (and thus protected by law) if it is engaged in by at least one other employee, on behalf of a group of employees, or if one employee is acting alone in the attempt to initiate group action related to terms and conditions of employment.
In February 2023, the National Labor Relations Board ruled in McLaren Macomb that an employer violates the NLRA when it requires covered employees to broadly waive their rights under the NLRA in separation agreements. More specifically, broad confidentiality, non-disclosure, and non-disparagement provisions may violate the NLRA if required in separation agreements of non-manager/non-supervisor employees. If an employer wishes to include such provisions in such an agreement, it should consult with legal counsel to discuss options such as narrowing the scope of the provisions to match the specific concerns at issue and mitigating the risk that the provisions might interfere with an employee’s rights under the NLRA.
Employers that use boilerplate separation agreements should review those forms and update them in light of this development. In addition, employers should consult legal counsel to draft severability clauses for separation agreements which, if carefully drafted, might allow a court or agency to strike out any provisions that might violate the NLRA while preserving the other important provisions of the separation agreement, such as the employee’s waiver of claims against the employer.
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