- 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.,
Kelly Kirby Ballentine
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
Company leaders—whether the GC, chief executive, or some other officer in charge—often call their outside counsel when a formal claim is made against them, or a dispute appears headed toward formal litigation. What business leaders often don’t think to do is put their insurance carrier on notice as soon as a claim is made. As a recent District of Massachusetts decision related to the heavily publicized Harvard affirmative action lawsuit reinforces, failing to alert your insurance carrier of a claim can have severe consequences.
For Harvard, these consequences materialized as a $15 million loss.
In November 2014, Harvard was sued in connection with rejecting a group of anonymous Asian American students from admission to the university. Still, the school did not provide its insurance carrier, Zurich, a notice of the claim until May 23, 2017. Zurich then denied coverage, relying on its “claims-made” policy, which requires that any claims asserted in the policy period be reported to Zurich no later than 90 days after the expiration of the policy period, i.e., by January 30, 2016. Significantly, that coverage would have applied to the $15 million in legal fees Harvard incurred to defend the lawsuit.
Incredulous by … Keep reading
While employee reviews have obvious benefits from a Human Resources standpoint, implementing a policy that ensures employee reviews are well-crafted and accurate today, can go a long way toward insulating the company from potential liability tomorrow. Courts have consistently held that discharged or transferred employees can use performance reviews to show that they were treated differently based upon their membership in a protected class. In such “disparate treatment” cases, a performance review may establish or contradict that: 1) the employee was qualified for a position; and 2) someone outside of the protected class with similar qualifications was treated more favorably.
When deciding whether an employee was “similarly situated” to someone who may have been treated more favorably, a court will consider “whether a prudent person, looking objectively at the plaintiff and her comparator would think them roughly equivalent, and similarly qualified for the position.”
Employee reviews may be used as a tool to create evidence of work experience, or lack thereof. For example, if Employee A completed six significant projects in 2018, but Protected Employee B, who held a similar position, only completed three significant projects, employee reviews documenting the work experience of Employees A and B may be … Keep reading