Skip to main content
Top Button
NLRB Update: General Counsel Memos Outline 2023 Agenda, Provide Guidance on Severance Agreement Ruli NLRB Update: General Counsel Memos Outline 2023 Agenda, Provide Guidance on Severance Agreement Ruli

NLRB Update: General Counsel Memos Outline 2023 Agenda, Provide Guidance on Severance Agreement Ruling

Following her recent success in overturning key National Labor Relations Board (NLRB) precedents on make-whole remedies and severance agreement provisions, the NLRB’s General Counsel, Jennifer Abruzzo, has issued two memos that provide insight into the NLRB’s enforcement positions and its agenda for 2023. If these memos are any indication, employers can expect that the NLRB’s aggressive pro-labor posture will continue at least for the remainder of 2023. 

Specifically, Memorandum GC 23-05, issued on March 22, 2023, provides the public with guidance on the McLaren Macomb decision, which placed significant limits on the ability of employers to utilize common non-disparagement and confidentiality provisions in severance agreements with employees covered by the National Labor Relations Act (“Act”). (See our previous summary of McLaren Macomb here.) Memorandum GC 23-04, issued two days earlier, addressed to regional offices of the NLRB, reveals significant areas of NLRB precedent that the General Counsel seeks to challenge in 2023, several of which have the potential to significantly impact unionized and non-unionized workplaces alike. 

McLaren Macomb Guidance 

From an employer perspective, the General Counsel’s guidance on the impact of McLaren Macomb is a mixed bag at best. One thing is clear: Given the fine distinctions the General Counsel makes between lawful and unlawful clauses, it is critical that employers who have or plan to use severance agreements have their forms vetted by labor counsel. 

Briefly summarized, the memo’s most important takeaways include the following: 
  • Retroactivity. As has often been the case when NLRB precedents shift, the General Counsel’s memo makes clear that the application of McLaren Macomb is retroactive, meaning that the NLRB may find unfair labor practices not only based on proffering a new agreement containing impermissible language, but also based on future enforcement of confidentiality and/or non-disparagement provisions in severance agreements executed long before the decision issued. 
  • Non-Disparagement. Regarding whether any form of non-disparagement language in severance agreements with covered employees is lawful, the General Counsel asserts that the scope of “disparaging” language prohibited by a non-disparagement clause must be limited to language that meets legal definition of defamation.
  • Confidentiality. The General Counsel notes that confidentiality provisions, which are “narrowly-tailored to restrict the dissemination of proprietary or trade secret information for a period of time based on legitimate business justifications,” remain potentially lawful under McLaren Macomb. This is in contrast to provisions that, “have a chilling effect that precludes employees from assisting others about workplace issues and/or from communicating with the Agency, a union, legal forums, the media or other third parties …,” which are prohibited. 
  • Supervisors. Under limited circumstances, the McLaren Macomb restrictions could apply to severance agreements with supervisors (who generally are not covered by the Act)—for example where a supervisor is terminated for opposing unfair labor practices committed by the employer.
  • Severability. On a more positive note for employers, the General Counsel indicates that the existence of provisions that violate McLaren Macomb will not invalidate an entire severance agreement, just the offending language. In other words, assuming they do not violate the Act for some other reason, key severance agreement provisions such as a general release of claims should remain enforceable even if the NLRB finds that an employer has committed an unfair labor practice by including unlawful confidentiality or non-disparagement language in the same agreement. 
Notably, in  addition to its discussion of the severance agreement clauses directly targeted by McLaren Macomb, the memo also hints at further aggressive action by the General Counsel regarding other types of restrictive covenants often contained in severance agreements (including non-compete and non-solicitation clauses), as well as restrictive language contained in other common employment documents (including offer letters) that could have the effect of chilling activity protected by the Act.

Next on the Chopping Block?

As the earlier memo makes clear, McLaren Macomb is unlikely to be the last significant NLRB precedent that shifts in 2023. Indeed, in her communication to regional offices indicating the types of cases that must be submitted to NLRB headquarters for advice, the General Counsel is unambiguous in detailing the precedents (and new issues) she seeks to bring before the full Board for consideration. Among others, targeted cases include those involving the definition of “inherently concerted” activity (i.e., where evidence of activity by more than one employee is not required) protected by the Act, which the General Counsel would like to see broadened substantially (likely to include what’s previously been considered purely political activity), as well as cases relating to the use of mandatory arbitration agreements, electronic monitoring of employees, the use of replacement workers during strikes, and the obligations of successor employers (i.e., employers who purchase a business with an existing union contract).

As both memos make clear, employers (whether unionized or not) should expect further developments from the NLRB that call into question employment policies, procedures, and documents long considered uncontroversial. Given the rapid pace of these changes, and the significance of their impact, employers should contact labor counsel to ensure compliance and avoid unpleasant surprises.

If you have further questions about the topics discussed in this article, please feel free to contact Manolis Boulukos, or any member of Ice Miller’s Workplace Solutions team. 

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.
View Full Site View Mobile Optimized