As a small business owner, chances are you are not familiar with the National Labor Relations Board (NLRB), the federal agency that enforces labor laws related to collective bargaining (i.e., unions). However, this has not stopped the NLRB from issuing a ruling that may affect your business. In February 2023, the NLRB issued a ruling that makes certain confidentiality provisions and all non-disparagement provisions in any employment separation agreement null and void. These confidentiality and non-disparagement provisions are important for a small business such as yours to protect your confidential information and public image, and ultimately your bottom line.
Confidential Information
It is very common for the terms of any commercial transaction to be confidential between the parties of the contract. The same is true of the terms of employment separation agreements. The employer does not want the former employee sharing with others if severance was paid and how much was paid, as well as, any other employee-friendly terms, such as waiving non-solicitation restrictions. If the former employee shares this information, it can put the employer at a significant disadvantage in dealing with other separating employees in the future. The NLRB’s ruling now prohibits employment separation agreements from containing any restriction on the employee from sharing the terms of the employment separation agreement, which severely hinders the employer’s ability to negotiate future employment separation agreements.
Non-Disparagement
It takes a business years to establish its public image, but this image can be destroyed in a matter of minutes. Especially today, where reviews and ratings control consumer choices, maintaining a positive public image is continuous endeavor. But this becomes significantly more challenging when a small business faces a hostile online campaign by a disgruntled employee who has been terminated. Due to the NLRB’s ruling, small business owners, such as yourself, are now severely restricted in their ability to protect their public image from former disgruntled employees.
With these new restrictions for employee separation agreements, small businesses will have to develop new methods to protect themselves against potential retaliatory actions by former employees. If you currently have any employment separation agreements that you would like reviewed, you can contact Ser & Associates at 305.222.7282 or [email protected].
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