NLRB General Counsel Jennifer Abruzzo has released a memo providing further guidance on the Board’s recent decision regarding the McLaren McComb. In a previous post addressing that decision, we highlighted several open questions that the Board had left unanswered, some of which were answered by a memo. It also presents GC Abruzzo’s interpretation of the deal, including its possible implications for wider contexts beyond retirement agreements. This post summarizes notable points from the notes.
- No defamation and confidentiality clauses are prohibited. Those that are strictly adjusted are still considered legal.
The memo immediately confirms that this decision does not outright prohibit the use of confidentiality and non-defamation clauses. However, this memo reminds employers that they must be strictly coordinated.
This memo suggests, as an example, that confidentiality clauses may be lawful if strictly tailored to limit the dissemination of proprietary trade secret information for a period of time based on legitimate business justification. indicates that there is However, confidentiality clauses that have a “chilling effect” that prevent employees from assisting others or communicating with the NLRB, unions, legal forums, media or other third parties are unlawful. There is a possibility.
In the case of non-defamatory clauses, the memo further adds clauses prohibiting statements “maliciously untrue,” i.e. those made with knowledge of falsehood or reckless disregard for truth are lawful. said it is possible. However, this memo did not provide guidance beyond this memo.
- General disclaimers or savings clauses may not preserve excessive confidentiality or dishonor clauses.
This memo also states, as the NLRB has repeatedly stated in multiple contexts, that general or broad disclaimers or “savings clauses” do not otherwise preserve overly broad confidentiality or non-discrimination clauses. These clauses often try to make it virtually clear that no clause in the contract is intended to limit an employee’s Section 7 rights. But that’s not enough. Restrictions must identify the specific types of Section 7-related conduct that employees may not engage in.
GC Abruzzo also noted that in the Stericyle case, he asked the National Labor Relations Board to “preparate a model preventive rights statement” about labor rules that employers could include in their employee handbooks. but said it could easily be applied to dismissals. pact. We will continue to track whether the board will take GC Abruzzo up on this request.
- Unlawful non-defamation and confidentiality clauses are unlikely to override other provisions of a termination agreement.
One of the positive developments in GC Abruzzo’s memo is that it confirms that unlawfully broad disrespect and/or confidentiality clauses are not likely to void the termination agreement as a whole. Instead, as many courts do, the Board and/or Regional Director reviewing such agreements will seek to void only the unlawful clauses “regardless of whether there is a severance clause.” However, GC Abruzzo also suggested that employers reach out to employees to set overly broad provisions to warn them that they no longer apply. , said, “If a valid accusation, alleging unlawful profiling alone, is filed, it may form the basis for consideration of dismissal on the merits.”
- McLaren Macomb applies retroactively.
In one of the most alarming statements in the memo, GC Abruzzo confirmed retroactive application for McLaren McComb. Specifically, while offering an employee an overly broad severance agreement is subject to the NLRA’s six-month statute of limitations, the GC also states that the , to maintain and/or enforce previously entered retirement agreements.” The six-month statute of limitations does not apply. Effectively, this means that regardless of when the employee signed the termination agreement, the board’s general counsel said that the employer could not enforce broad disgrace or confidentiality clauses limiting Section 7 rights. is thinking.
- Employers may face liability arising from offering overly broad contracts to supervisors in certain circumstances.
While supervisors are generally not protected by the NLRA, GC Abruzzo’s memo states that supervisors can be retaliated against for refusing to act on behalf of their employers when they commit unfair labor practices. clarified that the law protects Supervisors “refuse to offer illegally overly broad retirement agreements.” But the memo goes further. GC Abruzzo explained that she believes supervisors are protected under her NLRA, where employers provide termination agreements to prevent supervisors from “participating in board proceedings.”
- The train doesn’t stop with the confidentiality and non-defamation clauses in the retirement agreement.
One of the outstanding issues after the McLaren-McComm case is that its rationale is that confidentiality and non-defamation provisions in other employment-related policies, procedures, and contracts, such as pre-employment offer letters, and/or or whether it applies to other types of provisions in termination agreements. In theory, it could violate your Article 7 rights.
GC Abruzzo’s memo answered this in the affirmative, stating that “employer communications to employees that tend to hinder, inhibit, or coerce employees from exercising their Section 7 rights are a violation of workers. It would be unlawful if it was not rigorously tailored to address the special circumstances that justify a worker’s right.” ” or does not elaborate on how such situations might coexist with other aspects of the guidance. / or non-defamatory clause.
But GC Abruzzo went further. In response to a question about whether there was a problem with “other clauses normally included in retirement-related contracts,” GC Abruzzo said, “I believe.”[s] Its some other provisions. . may prevent employees from exercising their Article 7 rights. For example, non-compete clauses. No solicitation clause. No poaching clause. A broad waiver of liability and a pledge not to sue beyond the scope of the employer and/or employment claims and matters as of the effective date of the contract. Co-operation requirements, including any current or future investigations or proceedings involving the employer that affect the employee’s right to withhold under Section 7. ”
The key takeaways from the GC Abruzzo memorandum are certainly predictive of future actions by either the Board or GC Abruzzo and thereby the impact of McLaren McComb on confidentiality and non-defamation in the separation agreement. It expands beyond the terms.
GC Abruzzo’s opinion is particularly against the law. However, her views will certainly be reflected in investigative and enforcement actions and will seek to drive the outcome of future Board decisions on these issues.
GC Abruzzo’s long list of potentially problematic provisions is alarming, but employers should therefore continue their compliance efforts in the light of McLaren McComb and this latest Guidance Memorandum. Of note, we encourage employers to:
- Review your termination agreement (as recommended in a previous post) to ensure that non-disparagement and confidentiality provisions are tightly aligned and, where relevant, expressly express your Section 7 rights. Include splits.
- Determine if other agreements identified by the memorandum that may be at issue under McLaren Macomb require changes (i.e., change confidentiality and/or non-defamation clauses, non-disclosure agreements, etc.) offer letter).
- Evaluate and determine if and when to use non-defamation and/or confidentiality provisions. As I showed in my previous post, a one-size-fits-all approach is not always the best approach. Therefore, when including these clauses in a contract, employers should consider: (i) Type and reason for leaving employment; (ii) the type of workers and the nature of their work; (iii) Benefits offered.
- Employers should also be careful how they identify their employees as “supervisors” to ensure that they include the necessary restrictive language.
Employers will continue to monitor future developments closely and consider how the Board may expand its ownership of McLaren Macomb in other circumstances (employee handbooks, arbitration agreements, other policies and/or agreements) You should (as suggested in previous posts).
Mintz’s Employment Practice continues to monitor this issue closely and stands ready to assist employers as needed.
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