The focus remains on the National Labor Relations Board’s (Board or NLRB) ruling in February that asking employees to sign separation agreements with confidentiality and non-disparagement clauses is unlawful. Most recently, the Board urged the Sixth Circuit to enforce its February 21, 2023 decision in McLaren Macomb and Local 40 RN Staff Council, Office and Professional Employees, International Union (OPEIU), AFL-CIO, which found that the company had violated Section 8(a)(1) of the National Labor Relations Act (NLRA) when it offered a separation agreement to 11 furloughed bargaining members that included a broad non-disparagement provision and a provision treating the agreement as confidential.
Additional information regarding the NLRB’s McLaren decision can be found in Ballard Spahr’s previous posts on the matter: NLRB Establishes New Restrictions on Severance Agreements (published February 22, 2023), and NLRB General Counsel Issues Guidance Regarding Restrictions on Severance Agreements (published March 23, 2023).
The determination found that “[a]greements that contain broad proscriptions on employee exercise of Section 7 rights,” such as the non-disparagement provision in McLaren’s agreement, unlawfully “purport to create an enforceable legal obligation to forfeit [Section 7] rights.” The Board further held that prior tests meant to distinguish between enforceable and non-enforceable non-disclosure agreements, such as those set forth by the Board in its International Game Technology decision, failed to recognize the chilling effect any non-disparagement clause has on a member’s exercise of Section 7 rights and, as such, were insufficient. The Board’s McLaren decision effectively overrules the Board’s position set forth in its Trump-era opinions in the matters of Baylor University Medical Center and International Game Technology, which found non-disparagement clauses lawful unless the provision had a “reasonable tendency” to restrain a worker’s exercise of their rights under Section 7 of the NLRA.
Pursuant to federal law, the NLRB may apply to the appropriate federal appellate court to enforce any of its decisions. 29 U.S.C. § 160(e). McLaren Macomb is headquartered in Mt. Clemens, Michigan, necessitating filing the McLaren enforcement application with the United States Court of Appeals for the Sixth Circuit. While the filing of an application for enforcement is not required, statements made by Shela Khan Monroe, Vice President of Labor and Employment Relations at McLaren Health Care, give some indication the application is non-controversial and perhaps expected in this matter, explaining the application “is a typical step taken by the [NLRB] as it lacks the power to enforce its own decisions.” There is no indication that McLaren Macomb has sought to appeal the NLRB’s determination, or that the Board’s determination is otherwise stayed pending an order from the Sixth Circuit.
Employers should review their separation agreement templates to determine whether they comport with the latest ruling and guidance from the Board. Ballard Spahr’s Labor and Employment Group regularly advises clients on matters concerning the NLRA, preparing separation agreements, and the intersection of these issues.
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