Elections Have Consequences

The NLRB has ruled that non-disparagement and secrecy clauses in severance agreements are illegal.

Not only is the sort of thing that would never have happened under Reagan,Bush I, Bush II, or Trump.

None of them would have supported labor rights like this:

The National Labor Relations Board has ruled that it is generally illegal for companies to offer severance agreements that prohibit workers from making potentially disparaging statements about the employer or from disclosing details of the agreement.

The ruling by the board, which has a Democratic majority, overturns a pair of 2020 decisions, when the board was controlled by Republicans and found that such severance agreements were not illegal on their face. It continues the labor board’s worker- and union-friendly trajectory under appointees of President Biden.

The earlier decisions held that the severance agreements were illegal only if accompanied by other circumstances making them suspect, such as the possibility that they were being used to cover up the illegal firing of employees who tried to form a union.

Still, Anne Lofaso, a professor of labor law at West Virginia University, said the latest decision was limited to rights under the National Labor Relations Act, such as employees’ rights to draw attention to unsafe working conditions, or to engage in other activities that protect or benefit workers as a group.

She said an employer could still offer workers a severance agreement requiring them to give up their right to sue over, say, race discrimination under the Civil Rights Act of 1964.

In the ruling, issued Tuesday, the board said it was returning to longstanding precedent. The 2020 standard, it said, ignored the fact that a severance package with confidentiality or nondisparagement provisions could on its own “unlawfully restrain and coerce” workers’ labor rights.

………

Charlotte Garden, a professor of labor law at the University of Minnesota, said the 2020 approach had effectively tried to “narrow the rule to situations where an employer was trying to cover up their own previous unlawful activity and prohibit employees from talking about it.” The current ruling, she added, takes a broader view of when employees have the right to speak out.

The ruling could have a direct impact on severance agreements that seek to prevent former employees from publicly discussing sexual harassment or sexual assault accusations. The labor board is likely to consider those agreements illegal.

This is good, but what will really make a change is the willingness of federal prosecutors to frog-march senior executives out of their offices in handcuffs for breaking the law.

That is not under the purview of the of the NLRB, but I can dream of the day when the Department of Justice does this.