NLRB: Companies can’t silence employees as part of severance
(NewsNation) — It’s unlawful for companies to make laid-off employees agree not to disparage their former employer as part of a severance package, the National Labor Relations Board ruled Tuesday.
“The Board observed that the employer’s offer is itself an attempt to deter employees from exercising their statutory rights, at a time when employees may feel they must give up their rights in order to get the benefits provided in the agreement,” the NLRB said in a statement.
This decision reverses the board’s earlier decisions in two other cases, Baylor University Medical Center and IGT d/b/a International Game Technology, which were issued in 2020. Business Insider reports that Baylor had, during the COVID-19 pandemic, fired 11 union employees and asked them to sign severance agreements prohibiting them from making public comments “which could disparage or harm” the company in exchange for a payout.
Back in 2020, the publication notes, the NLRB, whose members are nominated by the president, had a Republican majority. At that time, the NLRB ruled that severance agreements with nondisparagement clauses were legal, and argued that they were “entirely voluntary,” according to Business Insider.
Now, however, the now Democrat-led NLRB found that offering employees this kind of severance agreement violates a federal law that gives people the right to collective bargaining.
“Baylor granted employers carte blanche to offer employees severance agreements that include unlawful provisions,” the NLRB’s opinion stated.
NLRB Chair Lauren McFerran said in a statement that it’s been “long understood” by the board and the courts that employers can’t ask employees to choose between “receiving benefits and exercising their rights under the National Labor Relations Act.”
“Today’s decision upholds this important principle and restores longstanding precedent,” McFerran said on Tuesday.
NLRB member Marvin E. Kaplan was the only one who dissented.
“My colleagues’ decision that Baylor and IGT must be overruled is based on a few fundamental misunderstandings of the Board’s holdings in Baylor and IGT,” Kaplan wrote.
News of recent layoffs at companies such as Meta, Google and Microsoft have put severance packages back in the spotlight. However, some tech workers are pushing back on what they say are misleading promises in these agreements.
Britt Levy, a former Meta employee, went viral on TikTok after refusing to sign a severance agreement with the company. She said the compensation Meta offered did not live up to what it initially promised.
Even though Meta CEO Mark Zuckerberg said employees who were laid off would get 16 weeks of severance pay and six months of health insurance coverage, Levy said that wasn’t provided in the agreement she was given.
“Right now I actually haven’t even received an unemployment check. Meta barely paid my final wages on the 17th of February,” she said on “Morning in America.”
Steph Whiteside contributed to this article.