New NLRB Decision Prohibits Overly Broad Language in Non-Disparagement and Confidentiality Provisions in Severance Agreements

Date   Feb 23, 2023

Executive Summary: The National Labor Relations Board (the Board) recently overruled two prior Board decisions and held that overly broad language in non-disparagement and confidentiality clauses included in severance agreements provided to eleven bargaining unit employees violated the employees’ Section 7 rights under the National Labor Relations Act (NLRA). See McLaren Macomb and Local 40 RN Staff Council, Office and Professional Employees, International Union (member Kaplan dissenting). Section 7 guarantees the rights of employees to organize, join labor unions, bargain collectively, and engage in other concerted activities for mutual aid or protection. In rejecting the provisions, the Board focused on their language, which broadly prohibited employees from making statements that could disparage or harm the employer’s image and further prohibited them from disclosing the terms of the agreement. 

2020 Decisions Overrule Prior Board Analysis: The Board noted that until its decision in Baylor University Medical Center, 369 NLRB No. 43 (2020), when faced with an allegation that a severance agreement violated the Act, it had focused on the language of the severance agreement to determine whether proffering the agreement had a reasonable tendency to interfere with, restrain, or coerce employees’ exercise of their Section 7 rights. However, in Baylor, the Board moved away from analysis of the specific language of the agreement and focused instead on the circumstances in which the agreement was presented to the employees. The Board found the agreement in Baylor did not violate the NLRA because, despite its broad language, it “was not mandatory, pertained exclusively to post-employment activities and, therefore, had no impact on terms and conditions of employment, and there was no allegation that anyone offered the agreement had been unlawfully discharged or that the agreement was proffered under circumstances that would tend to infringe on Section 7 rights.” A few months later, the Board reached a similar decision in IGT d/b/a International Game Technology, 370 NLRB No. 50 (2020), again focusing on the circumstances in which the severance agreement was offered to the employees.

McLaren Macomb Overrules the 2020 Decisions and Returns to Focus on the Specific Language of the Agreement: In McLaren Macomb, the Board overruled Baylor and IGT and held that “an employer violates Section 8(a)(1) of the Act when it proffers a severance agreement with provisions that would restrict employees’ exercise of their NLRA rights.” Thus, the Board returned to its prior principle of focusing on whether an agreement’s terms “have a reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights.” In making that determination, the Board will examine the language of the agreement, “including whether any relinquishment of Section 7 rights is narrowly tailored.”  The Board stated it was not called on in this case to define the meaning of “narrowly tailored.”

The Board examined the language of the Confidentiality and Non-Disclosure provisions and concluded that they do “interfere with, restrain or coerce employees’ exercise of Section 7 rights.”  The provisions stated:

Confidentiality Agreement. The Employee acknowledges that the terms of this Agreement are confidential and agrees not to disclose them to any third person, other than spouse, or as necessary to professional advisors for the purposes of obtaining legal counsel or tax advice, or unless legally compelled to do so by a court or administrative agency of competent jurisdiction.

Non-Disclosure. At all times hereafter, the Employee promises and agrees not to disclose information, knowledge or materials of a confidential, privileged, or proprietary nature of which the Employee has or had knowledge of, or involvement with, by reason of the Employee’s employment. At all times hereafter, the Employee agrees not to 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 Board held that the non-disparagement provision on its face substantially interferes with employees’ Section 7 rights, noting that “[p]ublic statements by employees about the workplace are central to the exercise of employee rights under the Act.” The Board found that the language in the provision prohibiting employees from making public statements that “could disparage or harm the image of Employer,” including, “it would seem, any statement asserting that the [employer] had violated the Act (as by, for example, proffering a settlement agreement with unlawful provisions)” was unlawfully broad, especially since it was not limited to matters regarding past employment and provided no definition of disparagement. The Board found this “comprehensive ban would encompass employee conduct regarding any labor issue, dispute, or term and condition of employment” with the employer. Such conduct is protected under the Act, limited only by the requirement that the employees’ comments not be so disloyal, reckless or maliciously untrue as to lose the Act’s protection. The Board also found the language overly broad because it applied to statements toward the employer’s “parents and affiliated entities and their officers, directors, employees, agents and representatives” and contained no temporal limitation. “The end result is a sweepingly broad bar that has a clear chilling tendency on the exercise of Section 7 rights by the subject employee.”

The Board reached a similar conclusion with regard to the language of the Confidentiality provision, which “broadly prohibits the subject employee from disclosing the terms of the agreement to any third person.” (emphasis by the Board). The Board held that “[s]uch a broad surrender of Section 7 rights contravenes established public policy that all persons with knowledge of unfair labor practices should be free from coercion in cooperating with the Board.” The Board also found this provision unlawfully overbroad because it would prohibit the employee from discussing the terms of the severance agreement with former coworkers, who could find themselves facing the decision of whether to accept a severance agreement. Additionally, it would prohibit the employee from discussing the terms of the agreement with the union. “A severance agreement is unlawful if it precludes an employee from assisting coworkers with workplace issues concerning their employer, and from communicating with others, including a union, and the Board, about his employment.”

After analyzing the language of the Confidentiality and Non-Disclosure provisions, the Board concluded that the agreements were not narrowly tailored to “respect the range” of employees’ rights under the NLRA.

Employers’ Bottom Line: Under the Board’s decision in McLaren Macomb, non-disparagement and confidentiality provisions in severance agreements must be narrowly tailored to ensure they do not impinge on employees’ Section 7 rights. As a practical matter, it may be difficult for employers to draft such provisions that they would consider effective and the Board would consider lawful. Arguably, the same analysis may not apply to severance agreements involving supervisors and managerial employees who are excluded from coverage under the NLRA and are not protected by Section 7, except in limited circumstances. Employers should review the provisions of their severance agreements and should consider consulting experienced labor law counsel to ensure the provisions of the agreements are not so broadly worded that they could be construed to chill employees’ exercise of their Section 7 rights.

If you have any questions regarding the issues addressed in this Alert, please contact the authors, Rick Warren, partner in our Atlanta office at, and Richard Bahrenburg, an attorney in our New York City office at Of course you can also contact the FordHarrison attorney with whom you usually work.