NLRB Says Severance Agreements That Contain Broad Confidentiality And Non-Disparagement Clauses Violate The National Labor Relations Act

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On February 21, 2023, the National Labor Relations Board ruled that confidentiality and non-disparagement clauses typically found in severance agreements are unlawful if they interfere with an employee’s Section 7 rights under the National Labor Relations Act. Section 7 rights include the right to organize, bargain collectively, and engaged in concerted activities that affect terms and conditions of employment. In McLaren Macomb, the Board held that an employer commits an unfair labor practice by including overly restrictive language into a severance agreement, regardless of whether the employer actually seeks to enforce its rights under the contract.