NLRB Issues Ruling Prohibiting Non-Disparagement and Confidentiality Provisions in Severance Agreements

By Megan S. Shaked

Over the last few years, we have seen states enact various restrictions on confidentiality and nondisparagement clauses in employment agreements. These changes were made in the wake of the #MeToo movement and in an effort to reduce perceived barriers to workers’ ability to raise claims for unlawful conduct in the workplace.

Last week, the National Labor Relations Board (NLRB) ruled that a severance agreement containing nondisparagement and confidentiality provisions is unlawful under the National Labor Relations Act (NLRA).

The main issue was whether the employer violated the NLRA by offering a severance agreement to 11 bargaining unit employees it permanently furloughed. The agreement broadly prohibited the employees from making statements that could disparage the employer. The agreement also prohibited the employees from disclosing the terms of the agreement.