NLRA Limits on Non-Disparagement & Confidentiality Provisions

Andrew Turnbull and Kwan Park authored an article for Bloomberg Law discussing the National Labor Relations Board decision in McLaren Macomb, which found that non-disparagement and confidentiality provisions in a severance agreement violate the National Labor Relations Act (NLRA) if those provisions have “a reasonable tendency” to interfere with an employee’s NLRA Section 7 rights.

“Although the McLaren Macomb decision clearly reverts to a pre-Trump, employee-friendly standard, it does not outlaw confidentiality and non-disparagement provisions altogether,” the authors wrote. “Rather, the Board indicates that those provisions can be lawful if ‘narrowly tailored,’ but it unfortunately declined to provide clear guidance for when such provisions could meet that standard. The Board’s decision may be appealed. Pending such challenge, the McLaren Macomb decision will likely remain the law unless or until a new Board overturns it.”

They added: “For now, employers should proceed cautiously when using confidentiality and non-disparagement provisions in severance agreements. Some risk averse employers may wish to remove non-disparagement and confidentiality provisions from their employment agreements. Other employers, however, may wish to take a more surgical approach to these provisions in consultation with experienced counsel.”

Read the full article.