National Labor Relation Board's General Counsel Foreshadows More Expansive Restrictions on Separation Agreements Following Board's Mclaren Macomb Decision

• Publication year: 2023

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Andrew I. Herman, Garrett P. Buttrey, and Jason E. Reisman ^*

In this article, the authors discuss the implications of a recent ruling by the National Labor Relations Board finding two separation agreements to be unlawful.

In McLaren Macomb, ¹ the National Labor Relations Board (NLRB or Board) found two routinely standard separation agreement provisions—confidentiality as to the agreement and non-disparagement—to be unlawful when included in an agreement offered to an employee.

Thereafter, the general counsel of the NLRB, Jennifer Abruzzo, issued guidance in an effort to clarify the scope and impact of that decision. The general counsel's guidance takes an expansive view of McLaren Macomb, foreshadowing more restrictions on separation agreement and other employment agreements.

Background

In McLaren Macomb, the NLRB held that employers violate the National Labor Relations Act (NLRA) when they offer severance agreements with provisions that would restrict employees in the exercise of their NLRA rights. The Board explained that, where an agreement "unlawfully conditions receipt of severance benefits on the forfeiture of statutory rights, the mere proffer of the agreement itself violates the [NLRA] because it has a reasonable tendency to interfere with or restrain the exercise" of NLRA rights.

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NLRB General Counsel Takes an Expansive View of McLaren Macomb

The guidance from General Counsel Abruzzo—the chief investigator and prosecutor of violations of the NLRA—is a warning to employers about her expansive views of the reach of the McLaren Macomb decision. In her memorandum, the general counsel provides the following insight about McLaren Macomb's broader implications:

■ Proceed with caution. McLaren Macomb is retroactive, says the general counsel. More troubling, the guidance explains that maintenance and/or enforcement of an existing severance agreement containing unlawful provisions is a continuing violation of the NLRA and, therefore, would not be barred by the NLRA's six-month statute of limitations.
■ No signature required. It is irrelevant whether the employee signed the severance agreement containing an unlawful provision. Merely offering such an agreement by itself is unlawful because it is inherently coercive to condition severance benefits on the waiver of statutory rights under the NLRA.
■ More than severance agreements at risk. Even though McLaren Macomb dealt with severance agreements, the decision is not limited only to

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