In a February decision, the National Labor Relations Board (Board) imposed new limits on confidentiality and nondisparagement provisions in agreements between employees and employers. The Board’s action represents a renewed federal law consideration for U.S. employers. New York employers are also subject to separate recent state legislation regulating confidentiality provisions with other employees.

Section 7 Rights

Section 7 of the National Labor Relations Act (29 U.S.C. Section 157) (NLRA) provides nonsupervisory employees with the right to organize and “engage in … concerted activities for the purpose of collective bargaining or other mutual and or protection,” regardless of whether they are unionized. An employer commits an unfair labor practice (ULP) when it interferes with these rights. In Mclaren Macomb, 372 NLRB No. 58 (2023), the Board considered whether certain restrictive covenant provisions in a severance agreement, including confidentiality and nondisparagement provisions, violated employees’ Section 7 rights. The employer, a hospital, furloughed 11 employees at the onset of the COVID-19 pandemic and offered each employee severance in exchange for executing a waiver and release of claims.