On February 21, 2023, the National Labor Relations Board (NLRB) issued the McLaren Macomb decision, reaffirming the established precedent that employers cannot require employees to waive their rights under the National Labor Relations Act through broad severance agreements. The case centered around severance agreements given to
furloughed workers, which contained provisions prohibiting them from criticizing their employer and disclosing the details of their agreement.

The nondisclosure clause in the severance agreements that McLaren Macomb provided to its employees included a requirement that they not divulge “information, knowledge, or materials of a confidential, privileged, or proprietary nature” and not “make statements to Employer’s employees or to the general public which could disparage or harm the image of Employer, its parent and affiliated entities and their officers, directors, employees, agents, and representatives.”

The ruling overturns the past Board findings in the 2020 cases of Baylor University Medical Center and IGT d/b/a International Game Technology, which abandoned existing precedent by concluding that providing employees with comparable severance arrangements was not illegal in and of itself.

The decision, in contrast, explains that simply offering employees a severance agreement that requires them to broadly give up their rights under Section 7 of the Act violates Section 8(a)(1) of the Act. The Board noted that, at a time when workers might believe they must give up their rights in order to receive the benefits given by the agreement, the employer’s offer is itself an effort to discourage workers from using their statutory rights.

NLRB Chairwoman Lauren McFerren, states, “It’s long been understood by the Board and the courts that employers cannot ask individual employees to choose between receiving benefits and exercising their rights under the National Labor Relations Act. The decision upholds this important principle and restores longstanding precedent.”

IMPORTANT TO NOTE: This ruling may be subject to litigation and additional legislation. We will put out additional information should this occur. The NLRB release can be found here.