A ruling by the Labor Relations Board in favor of sun rather than sunshine: How does the ruling affect a workplace severance agreement?
The terms of a laid off worker’s employment agreement and the terms and conditions of their job are no longer confidential because of the decision last week by the National Labor Relations Board.
- How will the new ruling affect employers when it comes to their future severance decisions? There is no legal requirement for employers to offer severance to their laid off workers. But they do so for several reasons beyond just maintaining goodwill with employees and the surrounding community, which may rely economically on the business’ workforce.
The ruling is a reversal of what the Trump-era NLRB members had decided in a prior case were lawful restrictions on employees as a condition of receiving severance.
“Companies are definitely incentivized to silence their departing employees…[because it helps them keep] all the skeletons in the closet,” employment attorney Alex Granovsky told CNN via email.
“This decision opens the door. It is a decision that could affect the dynamics of a severance negotiation because it favors sunlight over better companies.
“This board is signaling and reminding employers that the NLRB applies to employers regardless of whether workers are unionized,” said Andrew Herman, an associate in the labor & employment practice at law firm Blank Rome LLP.
State and local government agencies are not subject to the jurisdiction of the National Labor Relations Board. Neither are railways and airlines.
Some categories of workers are not likely covered by the ban, because they are excluded under the National Labor Relations Act, which the NLRB enforces. They include: Supervisors and managers with the authority to hire, fire, set pay and discipline workers, even if their company itself is subject to NLRB authority; independent contractors; agricultural and domestic workers; and anyone employed by a parent or spouse.
That said, the lawyers CNN spoke to agreed that it’s possible the labor board might consider applying it retroactively if someone files a charge for an alleged labor violation pertaining to a severance agreement that was signed or enforced within the past six months. Normally there is a six-month window akin to a statute of limitations to bring an alleged violation to the board’s attention.
Employers are obligated to disclose trade secrets and other confidential information as a way to protect their interests: A comment on Jon Hyman
Your employer may still demand that you do not reveal trade secrets and other confidential information that protects their interests, Herman noted.
They offer protection from being sued, having their trade secrets revealed, or having claims brought against them, with the caveat that they can buy some sort of compensation.
“I’m doing it because I want to get something from the employee in return. I’m buying finality [in having to deal with that employee],” said Jon Hyman, a management-side attorney and chair of the employment and labor practice at Wickens Herzer Panza.