The legal landscape for Ohio business owners has undergone a shift following the National Labor Relations Board’s (NLRB) February 21, 2023 McLaren Macomb decision. The NLRB ruled that standard non-disparagement and confidentiality provisions in severance agreements violate employees’ rights under the National Labor Relations Act (NLRA). This decision has far-reaching implications for employers in Ohio, affecting not only large corporations but also small and medium-sized businesses. The changes have prompted a reevaluation of existing legal practices and necessitates a fresh approach to drafting and enforcing severance agreements.
NLRB’s Guidance on Severance Agreements: Key Takeaways for Ohio Employers
On March 22, 2023, the NLRB’s General Counsel issued critical guidance on the McLaren Macomb decision. This memo outlines essential points for Ohio business owners to consider when crafting severance agreements, each of which is explored in more detail below:
- Releases and Waivers: These should only waive rights to pursue employment claims up to the date of the agreement. This ensures that employees retain their rights to pursue any claims that may arise after the agreement’s execution, preserving the balance of power between employer and employee.
- Retaliation and Supervisors: Supervisors are generally not protected by the NLRA; however, any form of retaliation against supervisors for refusing to enforce an overly broad severance agreement is unlawful under the NLRA. This includes agreements that prevent supervisors from participating in Board proceedings, emphasizing the importance of fair treatment and adherence to legal standards.
- Previous Agreements: Maintaining or enforcing agreements with unlawful provisions constitutes a violation of the NLRA. This highlights the need for Ohio business owners to review existing agreements and amend them as necessary to comply with the new legal landscape.
- Request Origin: The origin of the request to include broad confidentiality or non-disparagement provisions in a severance agreement is irrelevant. This means that even if an employee or union requests such provisions, they cannot waive the employee’s rights under the NLRA.
- Defamation Limitations: Non-disparagement clauses may be lawful if limited to defamatory statements. This requires careful crafting to ensure that the clauses do not infringe on employees’ rights to free speech and expression.
- Confidentiality Clauses: These must be carefully crafted to restrict only proprietary or trade secret information. This protects the company’s intellectual property while respecting employees’ rights to share non-confidential information.
- Financial Terms: Confidentiality regarding financial terms is lawful under the McLaren Macomb decision. This allows employers to protect sensitive financial information related to severance agreements.
- Disclaimers: Disclaimers may not cure overly broad provisions but can mitigate potential coercive impact. This emphasizes the need for precise language and clear communication in severance agreements.
The memo also emphasizes employees’ rights to engage in activities such as organizing a union, discussing wages, taking action to improve working conditions, striking, picketing, and more. These rights are fundamental to the NLRA’s purpose and must be respected in all severance agreements.
Practical Recommendations for Ohio Business Owners
The McLaren Macomb decision necessitates a thorough review of standard severance agreements by Ohio employers. Consultation with legal counsel is advised to ensure compliance with the NLRA and other applicable state and federal laws. This includes a comprehensive assessment of existing agreements, potential revisions to align with current legal standards, and ongoing monitoring to ensure continued compliance. By understanding the key takeaways from the NLRB’s guidance and seeking expert legal counsel, Ohio employers can ensure that their severance agreements are in full compliance with the law.
Gertsburg Licata’s Labor and Employment Practice Group routinely advises Ohio business owners on the preparation of severance agreements. Their expertise ensures compliance with the NLRA, state and federal labor and employment laws, and offers tailored solutions for Ohio business owners. Their in-depth understanding of the McLaren Macomb decision and its implications for Ohio businesses makes them a valuable resource for employers seeking to navigate this complex legal landscape.
Zena Elliott, Esq. is a Senior Attorney at Gertsburg Licata, brings a wealth of legal expertise to her role, having served as a Senior Assistant Attorney General for the State of Ohio and amassed over 25 years of private practice experience. Specializing in litigation, employment and worker’s compensation, as well as estate planning and probate, Zena has represented a diverse clientele, including individuals, entities, and public employers. Her extensive background includes jury trials involving workers’ compensation appeals. Beyond her legal career, Zena served a 4-year term on the Board of Education for the Aurora City School District and holds a minor and long-term sub-teaching license in Spanish. She enjoys tennis, skiing, and kayaking outside of the office. For legal matters, Zena can be contacted at [email protected] or 216-573-6000 x7010.
Jonathan Stender, Esq. a partner in the Labor & Employment practice group, brings over 20 years of experience representing management and employers in workplace law. Formerly a partner at Dworken & Bernstein, Jon specialized in heavy litigation, administrative practice, and counseling clients through employment law matters and Class Actions. Beyond his legal practice, Jon is an avid Cleveland sports enthusiast and holds a soft spot for his alma mater, the Washington Huskies. For consultations or inquiries, Jon can be reached at [email protected] or (216) 573-6000 x7013.
This article is meant to be utilized as an information legal update. Nothing in this article is intended to create an attorney-client relationship or to provide legal advice on which you should rely without talking to your own retained attorney first. If you have questions about your particular legal situation, you should contact a legal professional.
