March 2023: Board Rules that Employers May Not Offer Severance Agreements Requiring Employees to Broadly Waive Labor Law Rights

08 Mar


Update Applicable to:
All employers.

What happened?
On February 21, 2023, the National Labor Relations Board issued a decision in McLaren Macomb, returning to longstanding precedent holding that employers may not offer employees severance agreements that require employees to waive their rights under the National Labor Relations Act broadly.

What are the details?
The decision reverses the previous Board’s decisions in Baylor University Medical Center and IGT d/b/a International Game Technology, issued in 2020, which abandoned prior precedent in finding that offering similar severance agreements to employees was not unlawful itself.  

The Board’s decision, in contrast, explains that simply offering employees a severance agreement that requires them to broadly give up their rights under Section 7 of the Act violates Section 8(a)(1) of the Act. The Board observed that the employer’s offer is itself an attempt to deter employees from exercising their statutory rights, when employees may feel they must give up their rights to get the benefits provided in the agreement.      

It’s long been understood by the Board and the courts that employers cannot ask individual employees to choose between benefits and exercising their rights under the National Labor Relations Act.  Today’s decision upholds this important principle and restores longstanding precedent,” said Chairman Lauren McFerran.   

Below are some hyperlinks from our trusted source, Fisher Phillips, which contain answers to essential questions employers may ask:

For more information, please see the links below:

McLaren Macomb

Article 1Article 2

What do employers need to do?
Employers should review the links above and evaluate their handbook policies regarding severance agreement provisions to ensure that they comply with the law.

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