There is lots of buzz lately about a broad sweeping decision by the NLRB that limits the use of Confidentiality and Non-Disparagement provisions in severance agreements. Fox experts Andrew MacDonald and Bob Nagle wrote all about it in this Alert.

It sometimes helps to put the NLRA in context, especially in a state like California that already has a lot of worker protection laws.

First, as Andrew and Bob explain, the NLRA applies to all workforces, not just unionized workforces. That simple fact surprises many. For example, a non-union employer can be hit with an unfair labor practice charge. Especially if that business is a target of union organizers.

Second, the NLRA does not apply to supervisors, managers, and a few other categories of employees specifically exempted (such as government employees and agricultural laborers).

Given those limitations, when the NLRB issues a decision (like the recent decision about severance agreements), for most employers, it only impacts their non-exempt workforce. That means that any updates to severance agreements, to scale back what could be viewed as overbroad Confidentiality and Non-Disparagement provisions (which are notoriously hard to enforce for line level workers anyway, and are often in those agreements for their chilling effect), could be limited to non-supervisory workers.

Another consideration for California employers is the upswing in union activity in our state, especially in the Bay Area and Los Angeles, where unions still hold a lot of political sway. Think, for example, of businesses in the LAX corridor, hotels, convention centers, manufacturing, health care, sectors of entertainment production, and the like. Businesses in such union strongholds should be much more sensitive to an NLRB ruling than outlying businesses might need to be. An average small employer might have much more risk in areas like wage-and-hour compliance, and poorly executed termination decisions, than getting an unfair labor practice charge from the NLRB.

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