In a significant shift in labor and employment policy, the National Labor Relations Board (NLRB) has rescinded guidance related to its McLaren Macomb decision, a move that could have far-reaching consequences for employees negotiating severance agreements.
The rollback, initiated under Trump’s new leadership at the NLRB, weakens previous protections against overly broad confidentiality and non-disparagement clauses – provisions that have long been used by employers to restrict what departing employees can say about their former workplaces.
The McLaren Macomb decision, issued in February 2023, was a landmark ruling in which the NLRB found that severance agreements containing broad provisions limiting an employee’s ability to discuss workplace conditions violated the National Labor Relations Act (NLRA). The NLRB determined that even presenting severance agreements with such provisions could have a chilling effect on employee rights to engage in protected concerted activity. In response, the NLRB general counsel issued a memorandum clarifying that these restrictions applied retroactively and could be deemed unlawful in most circumstances.
Now, with the rescission of that guidance, the legal landscape is shifting once again. The move signals a return to a more employer-friendly stance, reflective of the Trump administration’s broader approach in prioritizing business interests over worker protections. Potentially, this change could allow companies to reinstate restrictive severance agreements that stop employees from discussing workplace conditions or pursuing claims related to labor violations.
For employees, this change raises serious concerns about transparency and bargaining power in severance negotiations. Without clear guidance from the NLRB, employers may now feel emboldened to draft agreements that severely limit what departing workers can say about their experiences. As a result, it could become more difficult for employees to share information about potential labor violations, workplace misconduct, or even illegal employer behavior.
The use of non-disclosure agreements (NDAs) and non-disparagement clauses has long been a contentious issue, particularly in cases involving workplace harassment, discrimination, and retaliation. Under McLaren Macomb, these provisions were under heightened scrutiny, giving employees more room to challenge restrictive agreements. Now, with that guidance rescinded, employees may find themselves facing increased pressure to accept severance terms that restrict their ability to speak out.
The broader implications of this shift extend well beyond individual severance negotiations. The change could also act as a deterrent to whistleblowing and labor organizing. If employees fear legal repercussions for discussing workplace conditions, it becomes much more difficult for collective action to gain momentum. This is particularly concerning in industries where labor rights violations are prevalent, as employees may feel they have no recourse or option but to accept a settlement that comes with strict gag orders.
In practical terms, employees navigating severance agreements will need to exercise greater caution. Seeking legal advice before signing any agreement will become crucial, as state laws and other federal protections may still provide some avenues for challenging overly broad provisions. Employees should also consider negotiating the terms of severance agreements rather than accepting them at face value, though the rescission of the NLRB guidance makes it more difficult to argue against restrictive clauses.
How Should an Employee Respond to Restrictive Severance Agreements?
Any employee who receives a severance agreement should seek legal counsel before signing. The attorneys at Potomac Legal Group specialize in severance review and negotiation, and we have advised thousands of employees in severance matters. State law and proposals in Maryland, Virginia, Washington, D.C., New York and California have begun addressing restrictive covenants in employment agreements. Even with changes in federal protections, you still have options for negotiating a better severance package with an experienced severance attorney.
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