Companies can no longer offer severance agreements that prevent workers from making derogatory remarks about their former employer, the National Labor Relations Board ruled on Tuesday.
The big picture: The federal agency said these agreements require workers to waive their rights under the National Labor Relations Act and that such policies violate the law.
- According to the NLRB, “The employer’s offer is itself an attempt to prevent workers from exercising their statutory rights at a time when workers may feel they have to forego their rights to those provided for in the agreement to receive benefits.”
- Employees also cannot be prevented from disclosing the terms of their severance pay, as set out in a termination agreement, the NLRB said.
Details: The NLRB’s decision reverses two decisions made during the Trump administration that found these types of agreements were “not unlawful.”
- The NLRB said in its ruling that its previous judgments were erroneous, failing to recognize “that unlawful provisions in a severance agreement offered to employees have a reasonable tendency to interfere with, restrict, or coerce the exercise of workers’ rights.”
- Previous rulings, made in cases involving Baylor University Medical Center and International Game Technology (IGT), held that offering similar employee termination agreements was not in itself illegal.
- “Today’s decision, on the other hand, explains that merely offering a termination agreement requiring them to largely waive their rights is…[and] that the employer’s offer is itself an attempt to discourage workers from exercising their statutory rights at a time when workers may feel they must forego their rights in order to obtain the benefits provided for in the agreement” , according to the NLRB decision.
thought bubble About Axios’ Javier E. David: Coupled with the FTC’s recent move to ban non-competition clauses, as Axios Markets’ Emily Peck recently reported, it’s clear that the Biden administration is aggressively rebalancing workplace rules to protect claw-edging workers , to support stronger back to more power in the post-pandemic era.
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