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Businesses may need to update their severance agreements

On Behalf of | Mar 14, 2023 | Firm News

As layoffs seem to be announced in rapid-fire succession these days, more and more employees are seeing severance packages and agreements for the first time. And, they do not know what to make of them. One common clause in these agreements has been broadly written confidentiality clauses, but a recent federal decision has found that these are no longer legal.

The National Labor Relations Board

The federal decision on broadly written confidentiality clauses was from the NLRB. This independent federal agency has oversight of most employees across the United States. They protect employee union rights and fight against unfair labor practices.

The recent decision

Sections 7 and 8(a)(1) of the National Labor Relations Act relate to these broadly written confidentiality clauses. In the prior administration, they found that these clauses were legal, but the newly appointed NLRB found the opposite. They have found that broadly written confidentiality clauses in severance agreements violate both Sections 7 and 8(a)(1).

What does this mean?

Moving forward, until the NLRB or a federal court overturns this decision, it will have an immediate effect. This means that, if your Sherwood, Oregon, severance agreement contains one of these broadly written confidentiality clauses, for now, it is likely not enforceable.

The takeaway

For Sherwood, Oregon, employees, the main takeaway is that employment law is constantly changing. If you face a layoff, before making any decisions, take a breath, and have a local attorney look at it first. It may or may not be enforceable, and it may not be legal. But, you may be signing away your rights, so you need to make sure you know what you are doing before you do it.