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NLRB decision means you need to check your severance agreements

On Behalf of | Feb 27, 2023 | Employer Law (Employer)

Employers focus on their customers, their employees and their bottom line. Part of this trifecta are the various business agreements that intermingle among them, which unfortunately can include severance agreements, especially these days. However, a recent decision by the National Labor Relations Board should put Lancaster County business owners on alert that they need to check their standard severance agreements because they may not currently be enforceable (at least, not entirely).

Confidentiality provisions

Severance agreements commonly include language that restricts what employees can say after they leave. These are called confidentiality agreements, and typically, they include provisions that restrict disparagement about the employer and talking about the nature of the severance agreement, among other confidentiality provisions. Indeed, some have blanket confidentiality provisions that can even prohibit saying that you ever worked for a Lebanon County employer. However, at least for now, these may no longer be allowable.

National Labor Relations Act

Sections 7 and 8(a)(1) of the National Labor Relations Act has, in the past, been interpreted as allowing such confidentiality provisions. However, recently (toward the end of February), the National Labor Relations Board found that these broad confidentiality provisions in severance agreements are no longer legal. Indeed, interpreted most broadly, if a Cumberland County severance agreement contains a broad confidentiality prohibition, one could argue that the entire severance agreement is void.

Be prepared

If you have not done a layoff, you should update your potential severance agreements now with this new information. Call your Hershey, Pennsylvania, general counsel or attorney to make sure your severance agreements are updated with this new guidance.

On the other hand, if you have already done rounds of layoffs, even if in the past, consult with your Dauphin County, GC or attorneys about the potential of litigation in the future. It may be a small chance, but being prepared now can save you time and money later.