Prior to the ruling, the Board held that severance agreements, by themselves, were not unlawful, with the Board focusing on the voluntary circumstances of the agreement’s proffer rather than the language of the agreement.

Now, an employer violates Section 8(a)(1) of the National Labor Relations Act if a severance agreement requires employees to “broadly waive their rights” under the Act, including prohibiting employees from disparaging their employer and disclosing terms of the agreement.

The Board’s decision returns to the traditional standard of analyzing the effect of a severance agreement and whether the provisions unlawfully restrain and coerce employees in the exercise of their Section 7 rights. Agreements that condition the receipt of severance benefits on the restriction or forfeiture of the rights under the Act or other statute will be unlawful as having a reasonable tendency to interfere with or restrain protected activity. As a result, employers proffering severance agreements wherein pay is contingent on employees signing away rights under the Act will be carefully scrutinized to protect against coercion.

Employers will need to ensure severance agreements are narrowly tailored to avoid prohibiting an employee’s ability to participate in Board charges or investigations. Likewise, wide-ranging limitations or bans regarding non-disparagement or confidentiality must avoid restricting the filing of ULPs and other labor disputes or otherwise prohibiting employees from communicating terms and conditions of employment with other employees or outside third parties. Employee comments that are reckless or maliciously untrue remain outside the scope of the Act’s protections.

We are not your typical firm that simply waits for a lawsuit to hit. Preventing a lawsuit is preferable to winning one. We take a preventative approach to help employers avoid the pitfalls in complying with the complex rules that govern today’s workplace. Above all, we pride ourselves on helping you avoid the lawsuit in the first place. 

Contact Alaniz Law & Associates today to discuss the specifics of your business with us. If you need help or counsel with severance agreements and releases we can help you. Furthermore, we can help you to assess the risk areas in your business, determine practical solutions for your specific business, and help you implement them.