{"id":28146,"date":"2023-02-23T15:40:00","date_gmt":"2023-02-23T15:40:00","guid":{"rendered":"https:\/\/www.dinsmore.com\/?post_type=publications&#038;p=28146"},"modified":"2025-12-15T20:47:27","modified_gmt":"2025-12-15T20:47:27","slug":"non-disparagement-provisions-in-severance-agreements-must-be-narrowly-tailored-under-new-nlrb-ruling","status":"publish","type":"publications","link":"https:\/\/www.dinsmore.com\/publications\/non-disparagement-provisions-in-severance-agreements-must-be-narrowly-tailored-under-new-nlrb-ruling\/","title":{"rendered":"Non-Disparagement Provisions in Severance Agreements Must Be Narrowly-Tailored Under New NLRB Ruling"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.dinsmore.com\/wp-content\/uploads\/2023\/02\/Legal-Alert_3_022323_Header-02.png\" alt=\"Non-Disparagement Provisions in Severance Agreements Must Be Narrowly-Tailored Under New NLRB Ruling\"\/><\/figure>\n\n\n\n<p>On February 21, 2023, the National Labor Relations Board (\u201cNLRB\u201d) overruled two Trump-era decisions, restoring earlier precedent concerning the legality of confidentiality and non-disparagement provisions in severance agreements.&nbsp; In <em>McLaren Macomb<\/em>,<a href=\"#_ftn1\" id=\"_ftnref1\">[1]<\/a> the Board overruled its decisions in <em>Baylor University Medical Center<a href=\"#_ftn2\" id=\"_ftnref2\">[2]<\/a><\/em> and <em>IGT d\/b\/a International Game Technology<\/em>,<a href=\"#_ftn3\" id=\"_ftnref3\">[3]<\/a> holding that an employer violates Section 8(a)(1) of the National Labor Relations Act (\u201cAct\u201d) when it offers a severance agreement containing provisions that would restrict employees\u2019 exercise of their rights under the Act.&nbsp; Such agreements, according to the Board majority, have a reasonable tendency to restrain, coerce, or interfere with employees\u2019 rights under the Act.&nbsp;<\/p>\n\n\n\n<p><strong><em>Trump-Era Test for Non-Disparagement and Confidentiality Requirements<\/em><\/strong><\/p>\n\n\n\n<p>In examining severance agreements prior to its decision in <em>Baylor<\/em>, the Board focused on the language of an agreement to determine whether it had a reasonable tendency to interfere with, restrain, or coerce employees\u2019 exercise of their rights under the Act.&nbsp; <em>E.g., Shamrock Foods Co.<\/em>, 366 NLRB No. 117 (2018).&nbsp; In <em>Baylor<\/em>, the Board shifted its focus from the language of the severance agreement to the circumstances under which it was presented to employees, holding that the \u201cmere proffer\u201d of a severance agreement containing a broad confidentiality provision was permissible under the Act.&nbsp;<\/p>\n\n\n\n<p>A few months later, in <em>IGT<\/em>, the Board dismissed an allegation that the employer maintained an unlawful non-disparagement provision in the severance agreement it offered to separating employees.&nbsp; The provision required the signer not to \u201cdisparage or discredit IGT or any of its affiliates, officers, directors and employees.\u201d&nbsp; Relying on <em>Baylor<\/em>, the Board reasoned that the agreement was voluntary, did not affect pay or benefits that were established as terms of employment, and was not proffered coercively.&nbsp; Consequently, the agreement was lawful under the Act.<\/p>\n\n\n\n<p><strong><em>What Employers Need to Know<\/em><\/strong><\/p>\n\n\n\n<p>In overruling <em>Baylor <\/em>and <em>IGT<\/em>, the Board in <em>McLaren<\/em> revived the principle that a severance agreement is unlawful if its terms have a reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their rights under the Act, and that employers violate the Act when they offer such agreements.&nbsp; The Board emphasized that the language of the severance agreement\u2014not the employer\u2019s motive\u2014is key to determining the existence of a violation, and concluded that the non-disparagement and confidentiality restrictions in issue facially interfered with employees\u2019 rights under the Act.<\/p>\n\n\n\n<p>Under the new test, a severance agreement is unlawful if it precludes an employee from assisting coworkers with workplace issues concerning their employer, and from communicating with others, including a union and the Board, about their employment.&nbsp; Going forward, employers will want to ensure that confidentiality and non-disparagement clauses in their severance agreements are narrowly tailored to respect the range of rights afforded to employees under the Act.<\/p>\n\n\n\n<p>If you are an employer with questions about how your business may be affected by this new decision, contact your Dinsmore Labor and Employment attorney to discuss.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><a id=\"_ftn1\" href=\"#_ftnref1\">[1]<\/a> <a href=\"https:\/\/www.dinsmore.com\/wp-content\/uploads\/2023\/02\/Board-Decision.pdf\">372 NLRB No. 58 (2023)<\/a><\/p>\n\n\n\n<p><a href=\"#_ftnref2\" id=\"_ftn2\">[2]<\/a> 369 NLRB No. 43 (2020)<\/p>\n\n\n\n<p><a href=\"#_ftnref3\" id=\"_ftn3\">[3]<\/a> 370 NLRB No. 50 (2020)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On February 21, 2023, the National Labor Relations Board (\u201cNLRB\u201d) overruled two Trump-era decisions, restoring earlier precedent concerning the legality of confidentiality and non-disparagement provisions in severance agreements.&nbsp; In McLaren Macomb,[1] the Board overruled its decisions in Baylor University Medical Center[2] and IGT d\/b\/a International Game Technology,[3] holding that an employer violates Section 8(a)(1) of\u2026<\/p>\n","protected":false},"author":8,"featured_media":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"tags":[],"publication-type":[12],"class_list":["post-28146","publications","type-publications","status-publish","format-standard","hentry","publication-type-legal-alerts"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.5 (Yoast SEO v26.9) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Non-Disparagement Provisions in Severance Agreements Must Be Narrowly-Tailored Under New NLRB Ruling - Dinsmore &amp; Shohl<\/title>\n<meta name=\"description\" content=\"Non-Disparagement Provisions in Severance Agreements Must Be Narrowly-Tailored Under New NLRB Ruling Read insights and legal analysis from attorneys at Dinsmore &amp; Shohl LLP.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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