{"id":2162,"date":"2023-03-27T10:55:33","date_gmt":"2023-03-27T14:55:33","guid":{"rendered":"https:\/\/www.bowditch.com\/campuscounselnewengland\/2023\/03\/27\/client-alert-nlrb-general-counsel-issues-guidance-regarding-confidentiality-and-non-disparagement-provisions-post-mclaren-macomb\/"},"modified":"2023-03-28T16:43:25","modified_gmt":"2023-03-28T20:43:25","slug":"client-alert-nlrb-general-counsel-issues-guidance-regarding-confidentiality-and-non-disparagement-provisions-post-mclaren-macomb","status":"publish","type":"post","link":"https:\/\/www.bowditch.com\/campuscounselnewengland\/2023\/03\/27\/client-alert-nlrb-general-counsel-issues-guidance-regarding-confidentiality-and-non-disparagement-provisions-post-mclaren-macomb\/","title":{"rendered":"Client Alert: NLRB General Counsel Issues Guidance Regarding Confidentiality and Non-Disparagement Provisions Post-McLaren Macomb"},"content":{"rendered":"

As noted in our prior client alerts (Employers Beware \u2013 Your Confidentiality Provisions May Come Back to Bite You<\/a> and Concrete Steps Employers Should Consider When Drafting Severance Agreements in the Wake of McLaren Macomb<\/a>), in its recently-issued decision in McLaren Macomb<\/em>, the National Labor Relations Board (the \u201cBoard\u201d) ruled that severance agreements with certain types of confidentiality and non-disparagement provisions unlawfully restrict employee rights under the National Labor Relations Act (the \u201cAct\u201d). This ruling has left many employers struggling to determine how to utilize these otherwise standard and important terms of severance agreements without creating significant legal risk.<\/p>\n

On March 22, 2023, the Board\u2019s General Counsel, Jennifer Abruzzo (\u201cGC Abruzzo\u201d), issued a memorandum regarding McLaren Macomb<\/em> (General Counsel Guidance Memorandum No. GC-23-05<\/a>) (the \u201cMemorandum\u201d). The Memorandum, which reflects guidance from the General Counsel to the NLRB\u2019s field offices, but does not represent the views of the Board, responds to inquiries raised about the impact of McLaren Macomb.<\/em> In providing this guidance, GC Abruzzo emphasized that McLaren Macomb<\/em> does not ban severance agreements \u2013 or confidentiality and non-disparagement provisions \u2013 entirely; employers may continue to proffer, maintain, and enforce such agreements as long as they do not contain overly broad provisions that \u201caffect the rights of employees to engage with one another to improve their lot as employees.\u201d<\/p>\n

Retroactive Applicability and Remedying Violations<\/h2>\n

GC Abruzzo noted that Board cases \u201care presumed to be applied retroactively\u201d and McLaren Macomb<\/em> is no exception. According to the Memorandum, while an unlawful proffer<\/em> of a severance agreement may be subject to the Act\u2019s six-month statute of limitations, attempting to maintain<\/em> and\/or enforce<\/em> a previously-entered severance agreement with unlawful provisions may be considered a continuing violation, thus, an unfair labor practice claim would not be time-barred even if filed outside of the six-month window.<\/p>\n

GC Abruzzo noted that even though it \u201cmay not cure a technical violation of an unlawful proffer,\u201d employers should consider remedying such violations now by contacting employees who are subject to severance agreements with overly broad provisions to tell the employees that the provisions are null and void and inform them that the employer will not attempt to enforce those agreements and\/or pursue any relief for breach of the unlawful provisions. In GC Abruzzo\u2019s words, such action by an employer \u201ccould form the basis for consideration of a merit dismissal if a meritorious charge solely alleging an unlawful proffer is filed.\u201d Employers should be advised that GC Abruzzo\u2019s suggestions on this issue reflect an extremely conservative approach. Employers are advised to confer with counsel before forging that path.<\/p>\n

When Confidentiality and Non-Disparagement Provisions May Be Permissible<\/h2>\n

GC Abruzzo\u2019s Memorandum recognized that narrowly tailored confidentiality clauses, designed to restrict the disclosure of proprietary or trade secrets for a defined period of time and based on legitimate business justifications, are lawful. GC Abruzzo added that OM 07-27, which discusses Non-Board Settlements<\/a>, remains in effect; that is, employers may use confidentiality clauses that prohibit employees from disclosing the financial terms of a settlement.<\/p>\n

As to non-disparagement provisions, GC Abruzzo opined that, under long-standing precedent, narrowly-tailored non-disparagement provisions that are \u201climited to employee statements about the employer that meet the definition of defamation as being maliciously untrue, such that they are made with knowledge of their falsity or with reckless disregard for their truth or falsity\u201d may still be found lawful.<\/p>\n

No Consideration of Surrounding Circumstances<\/h2>\n

As stated in the Memorandum, when \u201cobjectively analyzing whether a provision is facially lawful or not,\u201d the surrounding circumstances simply do not matter; pursuant to McLaren Macomb<\/em>, \u201can employer can have no legitimate interest in maintaining a facially unlawful provision in a severance agreement, much less an interest that somehow outweighs the Section 7 rights of employees.” The Memorandum noted that it does not matter whether an employee signs an agreement, as the proffer of the agreement itself constitutes a violation of employees\u2019 statutory rights.<\/p>\n

Impact on Other Provisions<\/h2>\n

While McLaren Macomb<\/em> focused on confidentiality, non-disclosure, and non-disparagement provisions, in the Memorandum, GC Abruzzo noted her belief that other provisions may also impermissibly impact employees\u2019 rights. Such provisions could include non-compete, non-solicitation, and non-poaching clauses; post-termination cooperation provisions; and broad releases and covenants not to sue (to the extent that they go beyond the employer and\/or are not limited to employment claims).<\/p>\n

Savings Clauses Won\u2019t Necessarily Save Employers<\/h2>\n

The Memorandum cautioned that so-called \u201csavings clauses\u201d or disclaimers in severance agreements will not necessarily cure overly broad provisions, noting that employers may still be liable for any mixed or inconsistent messages issued to its employees. Citing her office\u2019s March 7, 2022 brief in Stericycle, Inc., <\/em>GC Abruzzo renewed her recommendation that the Board develop a model statement of employee rights, which employers could\u00a0 include in employee handbooks and severance agreements.<\/p>\n

Next Steps?<\/h2>\n

The Memorandum reflects the NLRB\u2019s General Counsel\u2019s opinion; time will tell whether it is upheld by the Board itself or endorsed by courts. In the meantime, and as recommended in our prior alert (Concrete Steps Employers Should Consider When Drafting Severance Agreements in the Wake of McLaren Macomb<\/a>), employers should review their current severance agreements and consider revising them to reduce potential legal exposure while maximizing desired protections for their legitimate business interests.<\/p>\n

This alert aims to provide an overview of the NLRB\u2019s Office of the General Counsel March 22, 2023 Memorandum regarding McLaren Macomb<\/em>. Bowditch & Dewey\u2019s Employment & Labor practice group will continue to monitor this issue and will provide updates as any new developments unfold. Employers with questions about this issue or who are considering adjustments to their confidentiality and non-disparagement provisions are encouraged to contact their Employment & Labor attorney at Bowditch to help them evaluate their options.<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

As noted in our prior client alerts (Employers Beware – Your Confidentiality Provisions May Come Back to Bite You and Concrete Steps Employers Should Consider When Drafting Severance Agreements in the Wake of McLaren Macomb), in its recently-issued decision in McLaren Macomb, the National Labor Relations Board (the “Board”) ruled…<\/p>\n","protected":false},"author":1,"featured_media":1193,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_links_to":"","_links_to_target":""},"categories":[44,530],"tags":[462,540,289,527],"class_list":["post-2162","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employment","category-severance-agreements","tag-employee-rights","tag-mclaren-macomb","tag-national-labor-relations-board","tag-severance-agreements"],"acf":[],"yoast_head":"\nClient 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