Companies can no longer offer severance agreements that prevent employees from making disparaging remarks about their former employer, the National Labor Relations Board ruled.
It reverses a Trump-era ruling.
Companies cannot require employees to waive their rights as part of a severance agreement. The ruling said the requirements were “unlawful.”
The federal agency said these agreements require employees to waive their rights under the National Labor Relations Act, and that such policies are a violation of the act.
“The employer’s offer is itself an attempt to deter employees from exercising their statutory rights, at a time when employees may feel they must give up their rights in order to get the benefits provided in the agreement,” The NLRB said.
The NLRB’s decision reverses two made during the Trump administration that found these types of agreements were “not unlawful.”
The decision concerned a Michigan hospital. During the Covid pandemic, the hospital terminated 11 union employees and offered them a payout in exchange for signing severance agreements barring them from making public comments “which could disparage or harm” the company.
In 2020, the NLRB was operating with a Republican majority. It twice ruled that such limits on speech were legal, arguing in one of its decisions that severance agreements with nondisparagement clauses are “entirely voluntary.”
But those earlier rulings were flawed, the NLRB’s new Democratic majority said Tuesday, asserting that employees cannot waive their rights under federal labor law — and that asking them to could affect the rights of those still on the job.
The NLRB is a five-person organization whose members are nominated by the president.
Nondisparagement clauses, it reasoned, could prevent former workers from being able to assist investigations into ongoing labor law violations.
“Today’s decision, in contrast, explains that simply offering employees a severance agreement that requires them to broadly give up their rights…[and] that the employer’s offer is itself an attempt to deter employees from exercising their statutory rights, at a time when employees may feel they must give up their rights in order to get the benefits provided in the agreement,” the NLRB’s ruling said.
Be the first to comment