Companies can no longer silence laid-off employees with NDAs

As of February 21, 2023, the National Labor Relations Board ruled that employers can no longer prohibit employees from talking to reporters about their layoff or sharing information about their termination with other employees. Silencing the employees, the board says violates their rights under sections 7 and 8(a)(1) of the National Labor Relations Act. 

“A severance agreement is unlawful if it precludes an employee from assisting coworkers with workplace issues concerning their employer, and from communicating with others, including a union, and the Board, about his employment,” the board wrote in its decision. 

Prior to this ruling, companies have been requiring laid-off employees to sign non-disclosure agreements  (NDAs) in exchange for receiving severance packages. These NDAs effectively silence employees, preventing them from speaking out about their experiences, including any misconduct or unethical behavior they may have witnessed or endured, this not only harms the employees involved but also damages the company’s reputation and culture. 

As an HR consulting firm, we believe that companies have a responsibility to foster a culture of transparency and accountability. With this new board ruling in place effective immediately, companies should focus on creating a culture where current and former employees feel safe and supported to speak out when they witness misconduct or unethical behavior. 

We can help draft policies and severance agreements that comply with the NLRB’s recent decisions and protect you from future litigation. Contact us here