(2020) and IGT d/b/a International Game Technology, 370 NLRB No. 50 (2020) that upheld similar confidentiality and nondisparagement provisions in severance agreements. In overturning Baylor and IGT, the board stated “broad proscriptions on employee exercise of Section 7 rights have long been held unlawful because they purport to create an enforceable legal obligation to forfeit those rights. Proffers of such agreements to employee have also been held to be unlawfully coercive.”
In addition to making confidentiality and nondisparagement provisions essentially obsolete in agreements offered to workers covered by the NLRA, McLaren also expands and extends Section 7 protections to employees’ discussions of their terms and conditions of employment with third parties not affiliated with the employer.
WHO DOES MCLAREN AFFECT? Te McLaren decision applies to both unionized and nonunionized private employers who are subject to the jurisdiction of the NLRA. In other words, it applies to most private employers in the United States, regardless of the unionized status of your workforce. Importantly, however, the decision does not apply to many employees who are traditionally offered severance agreements, such as management-level employees, most supervisors, independent contractors and any other employees who are not covered by the NLRA. Tese classes of employees do not have Section 7 rights.
SHOULD WE HAVE EXPECTED THIS? WHAT’S NEXT? Te short answer to the first question is yes, you should have expected the NLRB to take this position or a similar position on the issue of employee speech and Section 7 rights. NLRB General Counsel Jennifer Abruzzo has been clear about her intention and goal for the NLRB to be much more aggressive in protecting Section 7 rights, including overturning multiple NLRB decisions that she believes eroded Section 7 rights. To learn more, GC Memo 21-04 sets out a roadmap of the issues that Abruzzo intends to tackle during her tenure.
As to what’s next from the NLRB, all eyes should be on the Stericycle case that is currently pending before the NRLB. In January 2022, the NLRB took the unusual step of issuing a notice inviting parties and amici to submit briefs addressing whether the board should adopt a new legal standard to determine whether employer work rules violate Section 8(a) (1) of the National Labor Relations Act. In short, the Stericycle case will determine whether the board will overrule the Trump- era Boeing case and return to the much more strenuous Lutheran Heritage standard. If McLaren is any indication, and we believe it is, it is more likely than not that the NLRB will reverse Boeing and will issue a much more stringent standard for evaluating employers’ policies.
KEY TAKEAWAYS 1. Te NLRB’s decision in McLaren immediately restricts the inclusion of confidentiality and nondisparagement provisions in severance agreements for most nonsupervisory employees.
2. Severance agreements should typically be handled on a case-by-case basis. Tis quick-change situation presented by McLaren gives employers the opportunity to revisit their severance agreements, and we strongly recommend that you coordinate with experienced labor and employment counsel on any changes.
3. Note that the McLaren decision is likely just a precursor for bigger changes that are coming from the NLRB. Employers should closely monitor the pending Stericycle case. If that case follows the NLRB’s recent trend, the standard the NLRB will apply to employers’ policies will change substantially.
Paul Satterwhite is a partner in Spencer employers interpret and understand the constantly changing landscape of employment laws to help the employers manage their employment law risks. Learn more at
spencerfane.com. member.
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