What A New Ruling On Nondisparagement Clauses Could Mean For You

When companies lay off or fire employees, they often include nondisparagement provisions as a standard part of any separation agreement. If you’ve ever been in that vulnerable position and agreed to a severance package that included a nondisclosure agreement, you are all too familiar with the scary silencing effect that this language can have.

But this month, the National Labor Relations Board, the federal agency in charge of protecting private sector employees’ rights, clarified that there’s a limit to how much an employer can make you keep quiet.

In a February ruling involving McLaren Macomb Hospital in Michigan, the NLRB said that furloughed workers had been asked to sign severance agreements with nondisparagement clauses that were overly broad, as those agreements violated the employees’ rights under the National Labor Relations Act to talk about their working conditions.

Making very broad nondisparagement clauses has been a general and intentional practice, said California-based employment attorney Ryan Stygar.

“The gray area between a truthful statement which is unflattering for the employer and a ‘disparaging’ remark can be hard to understand,” he said. “Employers want workers to think, ‘I should keep my mouth shut about labor issues because I might get sued.’”

But the National Labor Relations Act, first passed in 1935, protects the rights of eligible employees to join forces and engage in “concerted activities” against an employer’s union-busting behavior, wage theft and other unfair working conditions.

So in a March memorandum to regional offices, Jennifer Abruzzo, the NLRB’s general counsel, clarified that the decision in the hospital case had “retroactive application.” This means any severance agreements that were made prior to February in the U.S. by employers covered by the National Labor Relations Act, and that asked employees to “broadly waive” rights provided by it, are no longer valid, either.

In fact, any “employer communication” that violated an employee’s rights under the National Labor Relations Act is now on notice, according to the memo.

“For employees, the guidance signals that they cannot be lawfully precluded from making public statements on protected ‘concerted’ workplace issues, such as by criticizing an employer’s stance on union organizing,” said James M. Cooney, a labor and employment law expert in the Rutgers School of Management and Labor Relations.

This new clarification sends the message that preventing employees from talking to each other about their working conditions is no longer allowed, according to Florida-based employment attorney Donna Ballman.

Ballman said companies used overly broad NDAs to keep people from finding out about complaints made by fellow employees and then bringing similar claims of their own.

“And that’s what the NLRB says is now illegal,” she told HuffPost. “Employees should be free to discuss working conditions with co-workers and former co-workers.”

You may be wondering what exactly this means for you, especially if you’ve ever signed a severance agreement. Legal experts weighed in on pressing questions about how freely you can now talk about bad employers from your past.

Lawyers caution against using the new NLRB guidance as carte blanche approval to break an old NDA and start posting negative things about your old bosses on social media.

“Truthful statements about employers’ labor practices are usually protected,” Stygar said. “But — and this is crucial — defamatory statements are not protected. Any false statement, or any statement made with ‘reckless disregard’ for the truth, could land an employee in legal trouble.“

At the very least, talk with a lawyer first before making any public statement, attorneys said. “You should carefully review the purpose of the statement and what goal you want to achieve,” Stygar said.

Beyond the threat of being sued for violating your nondisparagement clause, bad-mouthing a previous employer is generally frowned upon because future employers may believe you will one day speak ill of them, too.

“I generally think it’s a bad idea because it makes you look unprofessional and undesirable to potential employers,” Ballman said.

“Lawful severance agreements may continue to be proffered, maintained, and enforced if they do not have overly broad provisions that affect the rights of employees to engage with one another to improve their lot as employees,” Abruzzo stated in her memo.

In other words, employers can still protect trade secrets and confidential information and can prohibit defamation in the agreements they ask you to sign while onboarding or offboarding.

“I’m seeing more narrowly tailored nondisparagement provisions since this decision,” Ballman said. “Some employers are now just saying employees can’t defame them or say anything maliciously untrue, and that should be OK with the NLRB.”

Watch out for employer communication language that infringes upon your legal rights.

“An overly broad nondisparagement clause occurs when protected speech, such as your right to report unlawful harassment to the [Equal Employment Opportunity Commission] or to a lawyer, appears to be prohibited by the agreement,” Stygar said.

“Examples of illegal and overly broad provisions to watch for in a nondisparagement agreement would include language seeking to silence an employee from disclosing information on workplace health and safety violations or a discriminatory work environment in violation of federal, state or local civil rights laws,” Cooney said.

Maybe. Abruzzo’s memo could be challenged in court by an employer appealing the decision.

“NLRB rulings are not self-enforcing, and therefore an employer could appeal to the federal courts any case applying the standards announced in the McLaren Macomb decision,” Cooney said. “However, the board did not create new law in that case, but rather returned to long-standing precedent, so it is probably not likely that a court would overturn a board ruling.”

At the same time, Cooney noted that actual cases will need to be litigated in front of the NLRB to see if it will adopt all aspects of the guidance.

Who is serving on the NLRB could make a big difference too, because it is common for presidential administrations to make new appointments and roll back NLRB policy decisions from their predecessors.

“The current NLRB is focused on scaling back some of the policy decisions from the [President Donald] Trump era. In this case, that includes policies which could enable employers to get around the statutory purpose of the National Labor Relations Act,” Stygar said.

“If Mr. Trump or another Republican candidate returns to the Oval Office … we can and should expect reversals in some form or another. How far those would go is anyone’s guess. But for now, I am optimistic of the direction the current NLRB is taking on these issues.”