You can now talk trash about your ex(-employer)!*

If you've signed a severance agreement recently, there's a good chance it contains a non-disparagement clause. Non-disparagement clauses generally prohibit you from bad-mouthing your former employer as a condition of receiving your severance package.

Some states, such as California already limit disparagement clauses (PDF link). Severance agreements with California residents can't prohibit employees from discussing unlawful acts, such as discrimination and harassment.

A February 2023 decision from the National Labor Relations Board (NLRB) may have undercut non-disparagement clauses more broadly and for the entire country. From the McLaren Macomb decision (PDF download):

The main issue presented is whether the Respondent violated Section 8(a)(1) of the National Labor Relations Act (Act) by offering a severance agreement to 11 bargaining unit employees it permanently furloughed. The agreement broadly prohibited them from making statements that could disparage or harm the image of the Respondent and further prohibited them from disclosing the terms of the agreement. Agreements that contain broad proscriptions on employee exercise of Section 7 rights have long been held unlawful because they purport to create an enforceable legal obligation to forfeit those rights. Proffers of such agreements to employee have also been held to be unlawfully coercive. The Board in Baylor University Medical Center2 and IGT d/b/a International Game Technology3 reversed this long-settled precedent and replaced it with a test that fails to recognize that unlawful provisions in a severance agreement proffered to employees have a reasonable tendency to interfere with, restrain, or coerce the exercise of employee rights under Section 7 of the Act. We accordingly overrule Baylor and IGT and, upon careful analysis of the terms of the nondisparagement and confidentiality provisions at issue here, we find them to be unlawful, and thus find the severance agreement proffered to employees unlawful.

McLaren Macomb reverses two 2020 decisions from the 🍊 administration — Baylor University Medical Center, 369 NLRB No. 43 and IGT, 370 NLRB No. 50. Those decisions required the employer to display animus or coercive conduct before a non-disparagement clause could be considered unalwful. Both decisions went against decades of established labor precedent. McLaren Macomb returns us to pre-2020 rules.

What's more, last week (March 22, 2023), NLRB General Counsel Jennifer Abruzzo published a memo suggesting that McLaren Macomb is retroactive. In other words, non-disparagement clauses in severance agreements executed before the February 2023 ruling may also be unenforceable. Memos are not legally binding, but they do give you an idea of how the NLRB might enforce the rules in other cases.

Here's the part where I remind you that I am not a lawyer, employment or otherwise. As I understand it, however, McLaren Macomb declares overly-broad non-disparagement clauses to be unlawful and therefore unenforceable. This does not mean that all non-disparagement clauses are unlawful. An unlawful provision also doesn't mean that other portions of the agreement are unenforceable. Read your severance agreement and consult with an attorney.

Whether you should put this ruling to the test probably depends on who you're complaining to, how many bridges you wish to burn, and how much money you can devote to paying lawyers. You're probably fine if you're just talking trash with your friends. Disparaging your former employer on social media would probably draw legal attention, regardless of enforceability. Future employers might also hold your disparaging words against you.

Also unclear: if a more management-and-capital-friendly administration reversed McLaren Macomb, would your non-disparagement clause become enforceable again? As Abruzzo notes in her memo, NLRB decisions are usually considered retroactive. That includes bad decisions.

For the time being, though, this NLRB decision clears the way for critical media coverage of companies, stronger enforcement of employment laws, and bigger unionization efforts.

Hat tip: Non-Disparagement Clauses Are Retroactively Voided, NLRB’s Top Cop Clarifies from Vice.

Also see: NLRB Doubles Down on Restrictions on Confidentiality and Non-Disparagement Provisions in Severance Agreements, with Board and GC Weighing In from the law firm Gibson Dunn.