NLRB memo puts spotlight on unfair labor practices in severance agreements
"Be wary," Duane Morris Partner Gerald Maatman said. "The NLRB has employer practices on the radar screen, and assumptions about well-settled labor decisions are now being reexamined."
Employers should make sure their severance agreements don’t restrict an employee’s right to discuss potentially unfair labor practices, the National Labor Relations Board (NLRB) said in a new memo issued Wednesday.
In the new guidance, National Labor Relations Board general counsel Jennifer Abruzzo said employers will now be seen as violating labor laws when they offer severance agreements requiring employees to waive their rights, especially their right to discuss potentially unfair labor practices.
Notably, Abruzzo said just offering such an agreement will be considered a labor law violation.
“The future rights of employees as well as the rights of the public may not be waived in a way that precludes future exercise of [National Labor Relations Act] Section 7 rights, including engaging in protected concerted activities and accessing the NLRB,” Abruzzo wrote.
Wednesday’s memo characterized this move as a return to established precedent, but FisherBroyles partner Eric Meyer said corporate counsel should review their severance agreements as soon as possible. Meyer warned on LinkedIn that many employers will likely now find their severance agreements are unusable and that the NLRB will be on the hunt for enforcement opportunities.
“While [the memorandum] does not carry the weight of law, [Abruzzo] is issuing it to all Field Offices,” Meyer wrote. “You can be sure that this is how the Board will operate at the local level in the future.”
Gerald Maatman, partner and chair of the workplace class action group at Duane Morris, agreed. He said that, far from a return to the pre-Trump status quo, Abruzzo’s memorandum represents a serious leftward swing of the regulatory pendulum.
According to Maatman, labor rights regulators have long been fighting to stop employers from prohibiting employees from banding together to assert group claims. He explained that the U.S. Supreme Court has generally not supported such efforts, and that employers have historically not had to worry whether their severance agreements comply with public policy.
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Now, the NLRB has made such policy concerns a relevant consideration for in-house lawyers.
“Be wary,” Maatman said. “The NLRB has employer practices on the radar screen, and assumptions about well-settled labor decisions are now being reexamined.”