NLRB Says Unlawful to Offer Severance Agreement with These Clauses

This applies to all companies regardless of union status:

The NLRB just held that confidentiality and non-disparagement clauses in severance agreements violate Section 7 of the National Labor Relations Act.

Companies violate the Act simply by offering a severance agreement containing those clauses.

This only applies to employees who are not supervisors. The NLRA does not apply to management personnel. But that is little solace because non-management employees often possess confidential information about a company and its trade secrets.

The Board’s opinion gives some insight into how to tweak your severance agreements to comply with its ruling. Spoiler alert: you’re probably not going to like the suggestions.

I am not blindly telling clients to change their severance agreements. Companies should think critically before making changes.

Companies must evaluate the risk. Is violating the NLRA worth keeping your confidential information confidential and prohibiting disgruntled employees from speaking badly about you?


Matt Austin is a nationwide management labor lawyer. Labor laws govern virtually all private-sector employees regardless of union membership. Proactive management of labor relations is critical to maintaining flexibility and increasing profit.

Matt also runs Austin Legal’s HR Legal Compliance Program that, for a small monthly fee, ensures HR decisions are protected by the attorney-client privilege.

Matt’s experience is deeply rooted in helping manage many aspects of his clients’ businesses. To effectively manage labor relations, he must also manage budgets, forecasts, new growth areas, and projected market corrections. High emotional intelligence is also critical to negotiating union contracts and to properly advise HR Legal Compliance members through the nuances of the law, its application to their companies, and how it will be received by employees.

You can reach Matt via email at