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The Labor Law Insider: Non-Disclosure and Non-Disparagement Agreements under Fire: A New Board Decision and a New General Counsel Memorandum, Part II



In the second installment of this two-part Labor Law Insider podcast, attorneys Terry Potter and Tom O’Day join host Tom Godar to discuss the impact of the National Labor Relations Board decision of McLaren Macomb, as well as the new General Counsel Memorandum (GC 23-05) interpreting that decision. As a result, employers need to review their employment-related non-disclosure and non-disparagement provisions in severance agreements. Moreover, O’Day and Potter suggest that the impact could be much broader. For instance, General Counsel Abruzzo takes on non-compete agreements  as well as non-solicitation agreements. Further, as presented by the Labor Law Insiders, this likely affects how employers craft policies in handbooks. The inadvertent inclusion of such provisions which could be found in violation of the National Labor Relations Act may also be used by unions to bring claims of unfair labor practices and leverage those claims into bargaining or organizing activities.

Potter suggests that while there will be challenges to the breadth of this interpretation of the Act, very often these challenges are upheld because of deference to the expertise of the Board. An alternative strategy, suggested by O’Day, might be for employers to let their representatives in Washington know of the practical impact that such a broad interpretation of the Act might have upon business and its ability to plan for the future.

Join us for this provocative discussion regarding the impact of the latest Board decision and General Counsel proclamations.

Read the Transcript

This transcript has been auto-generated using Adobe Premier Pro.

00;00;02;22 - 00;00;38;01
Tom Godar
Hello and welcome to the Husch Blackwell Labor Law Insider podcast. I'm Tom Godar your host and I'm glad that you've come along in this podcast. We welcome guests with practical expertise and experience regarding labor law issues, and they share their insights related to this ever changing area, the breadth of developments in laws related to unions and individual workers rights that we are experiencing under the Biden appointed National Labor Relations Board and led by general counsel Jennifer Abruzzo, is unprecedented.

00;00;38;19 - 00;01;05;01
Tom Godar
These developments demand that employers and those giving counsel to organizations stay tuned into these changes and make necessary adjustments to their practices and policies. When President Biden was elected, he promised to have the most union friendly administration ever, and he is fulfilling that pledge. So buckle up and hang on for this wild and wonderful ride in the world of labor law.

00;01;06;15 - 00;01;43;19
Tom Godar
Welcome back to the Labor Law Insider and our continued discussion of the impact of the McLaren Macomb ruling, as well as general counsel memoranda 2305. We started this discussion with my colleagues and labor law insiders Tom O’Day and Terry Potter, a Badger and a Kansas City guy, together and we want to continue with those discussions as we learn more about the impact that they might have upon employment agreements or release agreements on labor law and employment policies, as well as on a broad reaching area, including, for instance, non-compete agreements.

00;01;44;01 - 00;02;08;29
Tom Godar
So, guys, if we're ready, let's keep going. As we finished last discussion, we were talking about the impacts of this decision and the general counsel memorandum, on release agreements, how it impacts oh nondisclosure and non disparagement portions of those agreements. But we're just about to take a turn to talk about other impacts that we might see from the memorandum and the ruling.

00;02;09;14 - 00;02;17;15
Tom Godar
Terry, does the decision and the general counsel memorandum have a broader reach than just severance agreements?

00;02;18;06 - 00;02;52;03
Terry Potter
It does. It does. Even though we were dealing with a severance agreement in the case, there is no question that this is a broader reach in terms of policies and handbooks regarding these same principles, which, let's face it, we almost have these these restrictions in every handbook that we ever review in a general sense. So, yeah, there's a broad reach here.

00;02;52;18 - 00;03;16;16
Terry Potter
And and this is why when I tell the young attorneys here, when they happen in our investigation and the regional office for that investigation, ask for a copy of the relevant handbook regarding an investigation. Do not give them the entire handbook, because you may be focused on entirely different issue, but they will search that handbook for other potential violations.

00;03;16;16 - 00;03;25;03
Terry Potter
And all of a sudden you've got several other violations you're dealing with because you disclosed the entire handbook to reach your office.

00;03;26;02 - 00;03;54;23
Tom Godar
You know, the this whole thing reminds me that we have talked a couple of times about having the anatomy of a ULP as a discussion for one or two of these sessions, because what you've just said is so wise, and not so well known by all of our clients and others friends of ours who are listening that are attorneys and so forth, talking about how shrewd and thoughtful you have to be and what risks you have to take when you're in the soup.

00;03;55;19 - 00;04;23;08
Tom Godar
But right now we're just talking about policies and talking about the whole question as to whether or not you have to review this. We've been talking about this for over two years now, that under the Biden administration there's going to be some changes and the failure to make those changes. Not only leaves you open to the unfair labor practice, but it leaves you open to a union bent on organizing your employees to take away that direct relationship between the employer and the employee.

00;04;23;18 - 00;04;46;03
Tom Godar
To use these as stepping stones, as as leverages for them to go and argue that your employer is not friendly to employees, doesn't really respect their rights and so forth. And they've made that case time and time again at Starbucks and other places, even if it doesn't have a great deal of merit. So we have to be careful that this leads right itself into organizing don’t we?

00;04;46;03 - 00;05;16;29
Tom Godar
Let me take it one further step. Is all this going to wash out differently when some of the pronouncements in the GC memo are tested in court? I got to imagine that some of this is just not going to be found in the National Labor Relations Act and that some employer is going to be forced to defend its decisions beyond the NLRB decision making and into the courts.

00;05;17;09 - 00;05;18;16
Tom Godar
Is all of this going to hold up?

00;05;19;08 - 00;05;56;11
Terry Potter
You know, we never know. Most of these cases are appealed to the D.C. Court of Appeals, and they handle most NLRB appeals and are very knowledgeable of this area of the law. And they get frustrated at times, too, with the NLRB overstepping its bounds. But in general in general, all of these agencies get a lot of deference regarding how they want to run the agency and what policies they want to develop in terms of protecting the statute that they're sworn to protect.

00;05;56;25 - 00;06;03;29
Terry Potter
So, you know, who knows? I think it's more likely than not that things won't change until we get a different administration. More than anything else.

00;06;06;02 - 00;06;19;28
Tom Godar
Well, we have a presidential election in a while, and we've got it likely so far at least an incumbent running. So it may be a while before these policies change, given that incumbents tend to have a better shot at holding on to their office.

00;06;20;18 - 00;06;40;11
Tom O'Day
One thing that came to mind for me when when this decision came out and when the general counsel’s interpretation and the memo came out, is the need just to contact your representatives in Congress, your representatives in the House and the Senate, and the President as well, and just share any opinions. If you think that the general counsel's memo went too far, share that opinion.

00;06;40;19 - 00;07;01;25
Tom O'Day
And there are individuals in Congress who probably would be interested in hearing those opinions and pushing that agenda that you might that you might seek. So there is value in that. It's part of the political process. I think that's unfortunate because I think employers are just looking for some definitive line from the government to run their business against.

00;07;01;25 - 00;07;27;05
Tom O'Day
And if you say that the non-disparagement provisions are acceptable and you put them in an agreement, and then five years later, a general counsel and a National Labor Relations Board come out and say that retroactive use of an agreement five years ago is is void and not lawful, that's a problem for businesses. So I'd encourage just people to reach out and contact those policymakers and let them know the real world impact of these kinds of decisions.

00;07;28;02 - 00;07;58;18
Tom Godar
That's why stuff to think I've heard three overarching pieces. One, the rules have changed. We knew they were changing and it's become even clearer that they've changed. And this is going to impact first any agreements you have with employees who can be part of the bargaining unit or who might influence bargaining unit activities. And so you better take a look at changing those. Two, that this could impact your policies in your handbooks or otherwise, and that these are harbingers of change.

00;07;58;18 - 00;08;14;00
Tom Godar
We've already seen some of it, and you'd better be aware of it. Otherwise it can be used to put you in a place where you have to defend an unfair labor practice, which might be part of a larger play by unions to gain leverage. And finally, sure, take a look. Maybe some of this is going to be challenged.

00;08;14;11 - 00;08;26;00
Tom Godar
Maybe some of it will be challenged successfully. But if you're waiting for a white knight to come and say, wait a minute, this is a huge overreach, we don't have to pay attention. You may have to wait a really long time. Fair summary, guys.

00;08;26;16 - 00;08;27;08
Terry Potter
I think so.

00;08;27;17 - 00;08;52;00
Tom O'Day
That’s right. 

Tom Godar
I am so pleased that you were able to join me, Tom and Terry, from the far flung states of Wisconsin and Kansas. We appreciate so much that - in Missouri, excuse me, Missouri. We appreciate so much your participation. And we'll see how this plays out over the next couple of years. And thank you very much for joining the Labor Law Insider.

00;08;52;21 - 00;09;04;28
Tom Godar
If you find this helpful, share with your friends. Let them know that there's some voices out there that are trying to watch out and keep track of what's happening in the wild and wooly world of labor law. Take care.


Thomas P. Godar

Of Counsel

Tom O'Day


Terry L. Potter

Senior Counsel