Each year employers have to brace themselves for the latest onslaught of laws and regulations —both new and amended—that pertain to ensuring compliance with protections for their employees. As an employer, navigating the nuances of the ever-changing legal landscape of employee protections is probably one of the most stressful aspects of running a business, just after the daunting task of generating enough revenue to survive—and thrive. One segment of the law that most employers just may not be paying enough attention to (until now that is) is compliance with the National Labor Relations Act (NLRA). With just under 12% of all workers in the United States represented by a union, it is not uncommon for most employers to dissociate themselves from decisions by the National Labor Relations Board (NLRB). For those not familiar, the NLRA is designed to address the imbalance of power between employers and individual private sector employees by protecting their rights to organize into unions, engage in collective bargaining, and act collectively, such as striking. But the NLRA also prohibits several actions by employers, employees, or unions that are considered “unfair labor practices”—which, as you will read below, includes virtually all private sector employers regardless of whether they have unionized employees. In the first five months of 2023, the NLRB has issued two decisions that had widespread impact relating to employees in the form of regulating terms contained in severance agreements and the enforceability of noncompetition provisions. So similar to buyer beware, we now enter the time period of employer beware because these recent NLRB decisions will leave employers evaluating their future actions while simultaneously needing to revisit the terms and provisions of existing agreements.

Strict Confidentiality Provisions Considered Unfair Labor Practice

There is a strong case to make that there are benefits to parties on both sides when it comes to drafting certain provisions in severance and separation agreements. Employment lawyers representing employers or employees in drafting the terms of separation and severance agreements most likely have negotiated for the inclusion of or advocated for the exclusion of, certain common terms such as confidentiality, nondisparagement and nonsolicitation.