NLRB’s General Counsel Offers Guidance On Severance Agreements

Two months ago, in McLaren Macomb, 372 NLRB No. 58, the National Labor Relations Board (NLRB) ruled that employers cannot lawfully use employee severance agreements containing confidentiality and non-disparagement provisions that result in  employees’  broadly waiving their rights under the National Labor Relations Act (the Act) and that the mere offer of such a severance agreement violates the Act. These sweeping pronouncements have both union and non-union employers reexamining the provisions in their severance agreements.    

On March 22, 2023, the NLRB’s General Counsel, Jennifer Abruzzo, issued a guidance memorandum, GC 23-05, concerning  her interpretation of the McLaren Macomb decision and addressing topics such as the retroactive effect of the decision and the application of the decision to supervisors. While the guidance memorandum is written for NLRB staff members and does not have the force of law, it provides useful information for employers as to how she intends to apply the decision if an employee or union files an unfair labor practice charge challenging a severance agreement.

It will take some time for the McLaren Macomb decision to be examined and tested by the courts. In the meantime, employers need to carefully review their severance agreement language, assess their level of risk tolerance, and make any necessary modifications accordingly. KZA attorneys are available to assist employers with this analysis.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.