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NLRB Rules Employers Cannot Offer Severance Agreements that Require Employees to Waive Labor Law Rights

The National Labor Relations Board (NLRB) issued a decision in McLaren Macomb returning to longstanding precedent holding that employers may not offer employees severance agreements that require employees to broadly waive their rights under the National Labor Relations Act (NRLA). The decision involved severance agreements offered to furloughed employees that prohibited them from making statements that could disparage the employer and from disclosing the terms of the agreement itself.  

The decision in McLaren Macomb reverses the NLRB’s previous decision 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, by itself. Today’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 NRLA violates Section 8(a)(1) of the NRLA.

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