By Mark Carey
In an historic move, the federal government recently gave millions of working Americans new Freedom of Speech rights at work by banning pre and post dispute confidentiality agreements and nondisparagement agreements. The new rules apply to both private sector employees and unionized employees.
The National Labor Relations Board (“NLRB”) just ruled in February 2023 that nondisparagement and confidentiality provisions in employment agreements violate the National Labor Relations Act (“NLRA”) because the employment terms restrict the voluntary flow of information/complaints to the agency by employees and cuts off the agency’s primary source for investigations of the job market and employer misbehavior.
Adding to the excitement, President Biden signed into law the Speak Out Act on December 7, 2022 which bans pre-dispute confidentiality agreements (but not a post-dispute settlement agreement) in the workplace in cases involving sexual harassment and sexual assault. Click Here for Podcast Episode about Speak Out Act. “Employers may need to adjust their practices and policies to comply with the Speak Out Act, which invalidates nondisclosure agreements (NDAs) and nondisparagement agreements designed to keep employees from discussing instances of sexual harassment and sexual assault.” (SHRM). The Speak Out Act arose out of the #metoo movement, where NDAs were used to silence employees from speaking out about sexual harassment and sexual assault.
Several states passed laws banning the use of NDAs (California, Illinois, Maine, New Jersey, New York, Oregon and Washington) (SHRM).
What Does this All Mean for Employees?
The recent NLRB decision and the Speak Out Act are a huge and historic transformation in the dysfunctional employee employer relationship that has persisted for far too long. The employers hold on employee freedom of speech has been drastically reduced. The above new legal developments provide much greater protection for employees to speak out about sexual harassment and assault without fear of their employers firing them in retaliation and threatening a breach of their NDAs.
The NLRB decision in February 2023 strikes at the heart of default management practices to silence employees who accept severance agreements with broad confidentiality and nondisparagement provisions, now common in every severance agreement. Both private sector and unionized former employees who sign severance agreements are now permitted to talk to current and former employees and the public at large, using any conceivable medium of communication such as Instagram and TikTok, about the terms and conditions of their employment and the severance they received.
The only limit on former employees speech after signing a severance agreement with confidentiality and nondisparagement clauses is that they cannot knowingly engage in defamatory statements about their former employers. Specifically, former employees cannot make “disloyal, reckless, or maliciously untrue” statements about their employers. Employees should also be aware of the Defends Trade Secrets Act to ensure they do not violate this recent protection afforded employers. Other than these two exceptions, everything else about an employee’s employment is allowed, so “watch out” employers.
The NLRB Decision
The February 2023 NLRB decision reversed prior Board decisions,
“holding that employers violate the National Labor Relations Act when they offer employees severance agreements that require employees to broadly waive their rights under the Act. Specifically, the Board held that where a severance agreement unlawfully conditions receipt of severance benefits on the forfeiture of statutory rights, the mere proffer of the agreement itself violates Section 8(a)(1) of the Act because it has a reasonable tendency to interfere with or restrain the prospective exercise of those rights – both the separating employee and those who remain employed…
The severance agreement at issue in the case contained overly broad nondisparagement and confidentiality clauses that tend to interfere with, retrain or coerce employees’ exercise of Section 7 rights. Specifically, the nondisclosure provision contained a nondisparagement clause that advised the employees that they are prohibited from making statements that could disparage or harm the image of the employer…And, the confidentiality clause advised employees that they are prohibited from disclosing the terms of the agreement to anyone, except for a spouse or professional advisor, unless compelled by law to do so. The severance agreement included monetary and injunctive sanctions for breach of these provisions.” (Source).
A word of caution, the above decision does not cover supervisory employees, as they are not generally covered under the NLRA. The test to determine if you are a supervisor under the NLRA is found HERE.
Was the Decision Politically Motivated?
The National Labor Relations Board that decided the now overturned decisions were made up of President Trump appointees. The majority of the current Board is made up of political appointees of President Biden. The NLRB General Counsel is also a Biden appointee. So, it appears politics may have influenced the dramatic swing in the current law now favoring employees.
What Employees and Former Employees Can and Cannot Say?
According to the February 2023 NLRB decision,
“The broad scope and the wide protection afforded employees by Section 7 of the Act bear repeating. ‘It is axiomatic that discussion terms and conditions of employment with coworkers lies at the heart of protection Section 7 activity. Section 7 rights are not limited to discussions with coworkers, as they do not depend on the existence of an employment relationship between the employee and the employer, and the Board has repeatedly affirmed that the rights extend to former employees. It is further long established that Section 7 protections extend to employee efforts to improve the terms and conditions of employment or otherwise improve their lot as employees through channels outside the immediate employee and employer relationship. These channels include administrative, judicial, legislative, and political forums, newspapers, the media, social media, and communications to the public that are part of and related to an ongoing labor dispute. Accordingly, Section 7 affords protection for employees who engage in communication with a wide range of third parties in circumstances where the communication is related to an ongoing labor dispute and when the communication is not so disloyal, reckless, or maliciously untrue to lose the Act’s protection.” (Source). The last sentence is the antidefamation exception to the broad pro communication policy of the Act.
Existing Whistle Blower Protections
There have always been state laws that protect employees from retaliation and wrongful termination after confronting their employers in matters of public concern. Specifically, employees have the right, typically under the First Amendment in state constitutions, to speak out, in good faith, against employment practices that are fraudulent and harmful to the public interest at large.
A Final Word
Although these new legal changes favor employees by providing more freedom of speech, I wanted to be clear about the overall ability of employees to engage in freedom of expression at work in this DEI era. Employers are like private governments with their own rules and the state and federal governments have limited control. There are antidiscrimination statutes that bar employer misconduct. However, employers do in fact control much of what you can and cannot say while working. In this new DEI era, many employers are cautious about instituting drastic control over employee speech at work for fear of pissing off employees. But the DEI era is waning and management may soon silence your speech while at work. The new Speak Out Act and the above NLRB decision tip the balance back in the employee’s favor, for now.
If you would like more information about this topic, please contact our employment lawyers at Carey & Associates, P.C. or call 203-255-4150.