Lauren Teukolsky’s commentary was featured this week in a Law360 article discussing the future of non-disclosure agreements (NDAs) in severance agreements in light of the National Labor Relations Board’s recent ruling in McLaren Macomb. In McLaren Macomb, the NLRB found that offering severance agreements to employees that include NDAs and non-disparagement clauses is unlawful because doing so dissuades them from engaging in employee activity that is protected by Section 7 of the National Labor Relations Act, such as discussing their working conditions or pay.
Following the NLRB’s decision, however, some attorneys have expressed skepticism that employers will tailor their severance agreements to comply with the NLRB’s ruling. Ms. Teukolsky discussed her own experience with severance agreements in California following the state’s implementation of laws to restrict the use of NDAs and non-disparagement:
“’After California passed its own restrictions, what I'm seeing is employers will continue to include very broad nondisparagement provisions, and then they'll have a carveout’ stating that nothing in the agreement is intended to violate the law, Teukolsky said. ‘And when I come back and say, 'This nondisparagement is too broad,' they say, 'Well, we have a carveout.’'"
The NLRB decision, along with the General Counsel’s memo about the decision, suggest that carveouts are not sufficient to overcome the chilling effect of NDAs and non-disparagement provisions. The memo states: “It is critical to remember that public statements by employees about the workplace are central to the exercise of employees’ rights under the Act.”
The McLaren Macomb decision is a victory for workers that should be celebrated. Employers act at their peril if they continue to include overly-broad NDAs and non-disparagement provisions in any contract they ask an employee to sign, whether it be an employment agreement signed on hire, a severance agreement offered to a laid-off employee, or a settlement agreement to settle claims that have been filed.
To read the article in its entirety, click here. If you have questions about a severance agreement you’ve received and want to get in touch with our office, click here.
Lauren Teukolsky is the founder and owner of Teukolsky Law, A Professional Corporation.