Non-Disclosure and Non-Disparagement Agreements under Fire: A New Board Decision and a New General Counsel Memorandum

The Labor Law Insider invites two experienced counsel, attorneys Terry Potter and Tom O’Day, to explore the implications of the National Labor Relations Board’s decision in McLaren Macomb, issued in late February, as well as the even broader general counsel memorandum sharply curtailing employer rights to insist upon non-disclosure and non-disparagement in severance agreements. In part one of this podcast, host Tom Godar begins to explore the contours of these employee rights or employer restrictions. This change would affect all employees who would otherwise be eligible to participate in a bargaining unit under the National Labor Relations Act and bleed over as well to supervisors whose behaviors might be seen as having supported others in their protected and concerted activities. The new twist makes even presenting a non-disclosure or non-disparagement agreement to an employee—which is overbroad according to the new interpretation of the board and its GC—itself an unfair labor practice. According to General Counsel Abruzzo, the unfair labor practice would extend not only to those agreements which parties would now craft but would go back in time to agreements that include what are now considered overbroad non-disparagement or non-disclosure agreements, and that such agreements would be a continuing violation, with essentially no time limitation on when one could bring a charge based on overbroad language. Terry Potter suggests that while the instructions from the general counsel will find their way into enforcement actions brought by the board, the Administrative Law Judges before whom such cases are heard may curb the reach of the GC memorandum.It remains to be seen as to whether savings clauses that would carve out NLRB protected rights, or severability provisions, would be effective in defending against a ULP challenging the reach of the agreement. What is also missing from the GC memo is whether an agreement negotiated with counsel on both sides would have less scrutiny than one which was merely crammed down to employees who were in the process, for instance, of a reduction in force. Part two of the podcast continues to explore whether protected activity would include freedom from non-compete agreements, non-poaching agreements as suggested by the GC Memorandum.