- The McLaren Macomb decision is retroactive. This means that any severance agreement entered into by an employee prior to February 21, 2023, which violates the McLaren Macomb decision, is now unlawful.
- An unlawful severance agreement is a “continuing violation” of the Act, such that the six-month statute of limitations does not prohibit an employee from bringing a claim based upon a past severance agreement entered into over six months ago.
- The decision applies to current and former non-supervisory employees, which means in-house counsel must consider whether past and current severance agreements are lawful.
- Employees cannot waive their right to lawful confidentiality and/or non-disparagement clauses.
- An employee need not execute a settlement agreement for there to be a violation; the Board will find a violation of the Act if an unlawful severance agreement is offered, which could result in equitable and economic remedies in favor of the impacted employee.
- The McLaren Macomb decision impacts any employer communication to employees that tends to interfere, restrain, or coerce an employee’s Section 7 rights (i.e.,
If your company, like many, includes “standard” confidentiality and non-disparagement provisions in its employee severance agreements, those agreements may contravene a recent NLRB decision, McLaren Macomb. In that matter, the NLRB considered the validity of severance agreements offered to 11 employees who were furloughed where such severance was conditioned on them agreeing to the following, seemingly innocuous, confidentiality and non-disclosure provisions:
Confidentiality Agreement. The Employee acknowledges that the terms of this Agreement are confidential and agrees not to disclose them to any third person, other than spouse . . . professional advisors . . . or unless legally compelled to do so . . . .
Non-Disclosure. At all times hereafter, the Employee promises and agrees not to disclose information, knowledge or materials of a confidential, privileged, or proprietary nature of which the Employee has or had knowledge of, or involvement with, by reason of the Employee’s employment. At all times hereafter, the Employee agrees not to make statements to Employer’s employees or to the general public which could disparage or harm the image of Employer, its parent and affiliated entities and their officers, directors, employees, agent and representatives.
Prior to McLaren Macomb, such provisions had … Keep reading
I just came across a decision issued in the District of Massachusetts, Logue v. The Rand Corporation, and it reminded me of some key aspects of the attorney-client privilege related to in-house counsel about which I have written over the years. Some of those principles include the following:
- Not all confidential communications with in-house counsel (or any other attorney) are privileged; only communications for the purpose of giving or receiving legal advice can be privileged. Further, copying in-house counsel on an email does not make the underlying email privileged, and trying to cloak a non-privileged communication with the privilege even can lead to sanctions.
- While almost any employee has the ability to create a privileged communication by speaking with in-house counsel, that person typically has no ability to prevent the communication from being disclosed. A privileged communication with in-house counsel belongs to the corporation, company or other legal entity, and the ability to assert or waive the privilege rests in the hands of the Board or other managing agents.
- If the equity in a business is sold, the new Board or other managing agents typically retains the right to assert or waive privilege with respect to