The NLRB’s decision last month in McLaren Macomb, holding that the mere proffer of a severance agreement containing a broad confidentiality or non-disparagement clause violates federal law, left many employers questioning what to do with their existing severance agreements and wondering about the practical implications of the decision. (We wrote about the Board’s decision here.) Last week, the NLRB’s General Counsel, who oversees the Board’s 26 field offices, released a memo to assist field offices in responding to inquiries from the public about the decision. Below are the key takeaways from the memo:

• The case has retroactive effect. Though the Board did not say whether the case applied retroactively, field offices will apply it retroactively, as Board decisions are presumed to have retroactive application.
• The Board’s statute of limitations period may not limit all claims. It may be a continuing violation for an employer to maintain or enforce a severance agreement with an unlawful provision, even if the agreement was proffered or signed outside the Board’s six-month statute of limitations period.
• The NLRB will not void an entire agreement based on a few unlawful provisions. Field offices will make decisions based solely on the unlawful provisions of an agreement and would seek to have only those unlawful provisions voided, as opposed to voiding the entire agreement.
• Confidentiality as to the financial terms of the agreement is lawful. Based on 2006 guidance regarding approval of non-Board settlement agreements, requiring an employee to keep the financial terms of a severance agreement confidential is lawful and consistent with the Board’s decision in McLaren Macomb.
• Acceptable non-disparagement language is limited to non-defamation. Employers may restrict employees from making defamatory statements about them, such as statements that are maliciously untrue or that are made with reckless disregard for their truth or falsity.
• McLaren Macomb does not apply to supervisors, with the following caveat. Supervisors (as defined in the National Labor Relations Act) are generally not protected by the Act, so employers may continue to present them with severance agreements containing confidentiality clauses and broad non-disparagement clauses. However, those severance agreements may not interfere with a supervisor’s participation in a Board proceeding. Likewise, an employer may not discipline a supervisor who refuses to proffer an unlawfully overbroad severance agreement to an employee on the employer’s behalf.
• Other severance provisions may also be unlawful. While confidentiality, nondisclosure, and non-disparagement provisions are the most problematic terms, some other common provisions of severance agreements might also interfere with employees’ Section 7 rights, including non-compete clauses, non-solicitation clauses, no-poaching clauses, certain cooperation requirements and broad liability releases and covenants not to sue that go beyond the employer or that may go beyond employment claims and matters as of the effective date of the agreement.
• A savings clause will not necessarily cure overly broad provisions. For a savings clause or disclaimer to be effective, it must affirmatively and specifically set out employee statutory rights and explain that nothing in the severance agreement should be interpreted as restricting those rights. The memo lists nine specific rights that should be included in a savings clause. General disclaimers, such as “this agreement is not intended to prohibit an employee from engaging in any lawful or protected activity under federal or state law,” are not sufficient.
• All employer communications are subject to scrutiny if they tend to interfere with or coerce employees in the exercise of their statutory rights. The impact of McLaren Macomb extends beyond severance agreements to apply to all communications from employers to employees, including offer letters. In light of this guidance, employers should consider reviewing their offer letters, as well as other types of employee “communications,” such as employment agreements and employee handbook policies.

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