Your Employment Rights Reinstated

On February 21, 2023, employees earned a win in the workforce world.

The National Labor Relations Board (NLRB) determined in case 07-CA-263041 McLaren Macomb that employers cannot offer employees a severance package with the stipulation that the employees forfeit their rights under the National Labor Relations Act, prohibiting them from disclosing the agreement or making statements that could be construed as disparaging against the employer.

So basically, prior to this decision, employers were ensuring employees’ silence about the circumstances of their furlough or layoff by telling employees that they would not receive severance (continued pay and benefits for a certain amount of time after the end of employment). This enabled employers to avoid bad press, protected the company’s reputation, and allowed them to do business as usual without having to worry that a disgruntled employee would start talking. And in this most recent determination, the Board said that they can no longer do that.

What are The National Labor Relations Act and The National Labor Relations Board?

The National Labor Relations Act was established in 1935 to protect private sector employees’ right to collective bargaining and workplace democracy, allowing employees to advocate for better working conditions without fear of retaliation from the employer. So, in a nutshell, it allows employees to point out concerns regarding working conditions and to take steps to improve those working conditions. This is the law that protects union participation or talks about forming a union.

The National Labor Relations Board is the independent federal agency charged with ensuring that the Act is upheld and properly applied.

How were employers allowed to get away with stifling employees if The National Labor Relations Act has been around since 1935?

The Board’s recent determination is a reversal of a previous decision made in 2020 stemming from two separate cases where the Board found that employers requiring employees to give up their protected rights in order to receive benefits was not against the law in and of itself.

The 2020 decision went against strong precedent that had been established in the past and put people who had just lost their income in a situation where they were forced to choose between their rights under the National Labor Relations Act or being able to support themselves and their families while out of work.

The Reversal

The reason the National Labor Relations Board reversed the 2020 decision is that upon further review in a new case, it found that employers requiring employees to give up their protected rights under general and vague terms in order to get their severance package does, in fact, violate Section 8(a)(1) of the Act, which states that an employer may not “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7.” The employer’s severance package offer, therefore, was determined to be a tactic to dissuade employees from evoking their rights when the employer knew that the employees were in need of the severance package for survival.

Why is this important, particularly right now?

In 2022 and 2023 (so far) there have already been mass layoffs across many industries, but particularly in the tech world. Now, I’m not privy to the severance agreements related to all of these layoffs, but now that non-disclosure agreements under vague terms pertaining to severance eligibility are unlawful, it gives those people and future employees who receive a termination notice the ability to accept a severance package without having to forfeit their rights.

What’s Next?

The Board’s decision could be appealed, but as of right now, it’s in effect. The Board’s decision stated that employers cannot enforce broad, vague stipulations regarding employees’ rights under The National Labor Relations Act in their severance agreements. It remains to be seen how or if employers will be able to work within this rule if the stipulations aren’t so broad. Time will tell.

This information was found on the National Labor Relations Board website at www.nlrb.gov.