Terminated employees cannot be barred by severance from making disparaging statements about their former employer or disclosing the terms of the contract, the National Labor Relations Board ruled Tuesday, striking down a pair of rulings under the Trump administration.
An employer lawyer said the ruling was expected in light of the change in administration.
The case was filed by a union on behalf of 11 employees at McLaren Macomb, a hospital in Mount Clements, Michigan, who were first temporarily, then permanently, laid off in response to the COVID-19 pandemic. The case is McLaren Macomb and Local 40 RN Staff Council, Office and Professional Employees International Union, AFL-CIO.
The decision overturned a 3-1decision issued by a Republican-dominated board in March 2020 in Baylor University Medical Center and Dora S. Camancho where it held that a non-disparagement provision was lawful.
That decision was confirmed by the board in a November 2020 decision involving a London-based company in the IGT d/b/a International Game Technology and International Union of Operating Engineers Local Union 501, AFL-CIO.
Tuesday’s ruling, which partially overturned an administrative law judge’s decision, was approved by the NLRB by a 3-1 vote, with Republican Marvin E. Kaplan dissenting.
The NLRB said in a statement that Baylor and IGT decision that “abandoned previous precedent” and that “simply offering employees a severance package that requires them to waive their rights” violates Section 7 of the National Labor Relations Act, which guarantees workers the right to self-organize.
“The board found that the employer’s offer is itself an attempt to discourage employees from exercising their statutory rights, at a time when employees may feel they must give up their rights in order to receive the benefits provided in the agreement,” the statement said .
“It has long been understood by the Board and the courts that employers cannot ask individual employees to choose between receiving benefits and exercising their rights” under the NLRA, it said.
Mr. Kaplan’s dissent said “Baylor and IGT were sound, pragmatic decisions fully consistent with the (NLRA), and colleagues have failed to establish sufficient grounds” to overturn them.
Joshua H. Viau, regional managing partner with Fisher Phillips LLP in Atlanta, said: “We saw this coming. There will be more scrutiny under this board of all employee policies and procedures and language,” which will “swing the pendulum back to where it was in the pre-Trump era.”
Mr. Viau said companies’ reaction to the rule “really depends on the employer’s risk tolerance,” because the decision “doesn’t provide a lot of insight” on how to move forward.
“I don’t necessarily think” that employers need to reissue past agreements, he said, “but I think it’s prudent to revise the language of severance agreements going forward to at least put some disclaimer in place to get some protection that way .”