(CNN) Many questions have been raised about the implications and scope of a recent decision by the National Labor Relations Board to prohibit employers from requiring laid-off workers to sign certain types of non-disparagement and confidentiality clauses if they wish to receive severance pay.
Who is covered? Is it retroactive? Can my employer never again demand that I remain silent in exchange for severance pay?
CNN Business put these and other questions to some employment lawyers to get their opinions. Here are their answers.
1. Who does the new ban apply to? Most private sector employers in the US are subject to the authority of the NLRB and must abide by its decisions.
And the recent decision will apply to both their union and non-union workers.
“This sign signals and reminds employers that the NLRB applies to employers regardless of whether employees are members of a union,” said Andrew Herman, a labor and employment practice associate at law firm Blank Rome LLP.
2. Who is not fall under the ban? Certain groups are not subject to NLRB authority.
Federal, state, and local government agencies, including public schools, libraries, and parks, are not within NLRB’s jurisdiction. Neither are railways and airlines.
Some categories of workers are unlikely to be covered by the ban because they are excluded under the National Labor Relations Act, which the NLRB enforces. They include: supervisors and managers with the authority to hire, fire, pay and discipline employees, even if their company itself falls under NLRB authority; independent contractors; agricultural and domestic workers; and anyone employed by a parent or spouse.
3. Does the ruling have retroactive effect? That’s hard to say definitively. The decision published by the NLRB does not explicitly say it is retroactive, Herman noted.
In general, NLRB decisions can be assumed to be retroactive “unless it would be unfair to the employer or create an injustice,” said attorney Michael Healey of Wagner, Falconer & Judd Ltd. In the latter case, Healey said, it’s reasonable to assume that may not be because employers have been offering severance agreements in recent years based on a 2020 NLRB decision that was effectively overturned by the board’s latest ruling.
That said, the lawyers CNN spoke to agreed that it’s possible the Labor Board would consider applying it retroactively if someone files a suit for an alleged labor violation related to a termination agreement made within the past six months. is signed or enforced. There is normally a six-month period, similar to a statute of limitations, to bring an alleged violation to the attention of the board.
4. Employers can now do that too never require me to remain silent about the company as a condition of receiving severance pay? No, in some circumstances they still can.
The NLRB’s decision last week prohibits employers from requiring laid-off employees to keep both the terms of their termination agreement and the terms of their job (including wages, hours, health and safety issues, etc.) secret.
But your employer may still require you not to disclose trade secrets or other confidential information that protects their business interests, Herman noted.
And employers can still ask you to waive your right to file future claims or file a lawsuit against them.
5. How does this new ruling affect future dismissal decisions by employers? It’s easy to forget, but there is no legal obligation for employers to offer laid-off employees redundancy. But they do this for a variety of reasons that go beyond maintaining goodwill with employees and the surrounding community, which can be economically dependent on the company’s workforce.
They offer severance payments to buy protection from things like being sued or publicly discredited, from having their trade secrets disclosed or otherwise brought claims against them.
“I do it because I want to get something in return from the employee. I buy finality [in having to deal with that employee]said Jon Hyman, a management attorney and chair of employment and labor practice at Wickens Herzer Panza.
But no longer being able to require an employee to remain silent about the terms of their job or what’s in their termination agreement reduces the amount of protection an employer can buy. So employers may want to pay less for it, Hyman suggested.
“There is a real risk to employees that the case will negatively impact the size of severance payments going forward,” he said.