Last week, the National Labor Relations Review Board announced that employers can no longer force employees to be silent about the terms of their severance agreement, nor can they require a non-disparagement clause as a condition of that agreement. “Every smart employer in the country is changing their handbooks and severance agreements,” says Mark Hanna, the vice president of public policy for the National Employment Lawyers Association and a founding partner at the labor law firm Murphy Anderson, who has represented workers in wage disputes and collective actions.
There are still plenty of unknowns about how the ruling will play out, chief among them whether past severance agreements will be retroactively affected and whether severance agreements for C-suite employees will be covered.
To unpack what we do know right now—and what HR professionals and their legal teams should be thinking about as they try to understand the new NLRB ruling—I reached out to Hanna, as well as a senior human resources executive who has written many of these agreements and requested anonymity so they could speak freely about their use.
Here’s what we know—and how to think about what's ahead:
- Non-disclosure language is everywhere.
While non-disparagement clauses are often a normal part of severance agreements, especially for involuntary exits, they can also appear in employee handbooks, offer letters, and settlement agreements, notes the HR executive I interviewed.
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