The End of Silence: How New Labor Rules Empower Laid-Off Workers

Introduction: A Shift in Worker Rights

In a groundbreaking move, the National Labor Relations Board (NLRB) ruled in February 2023 that companies can no longer require laid-off employees to sign overly broad confidentiality or non-disparagement clauses in exchange for severance pay. This decision, rooted in the McLaren Macomb case, marks a significant shift in the balance of power between employers and employees. For workers facing layoffs, this ruling means greater freedom to speak out about their experiences without fear of losing severance benefits. Let’s dive into what this means for businesses, employees, and the future of workplace transparency.

The NLRB Ruling: What Changed?

The NLRB’s decision, effective immediately as of February 21, 2023, prohibits employers from including clauses in severance agreements that broadly restrict employees’ rights under Sections 7 and 8(a)(1) of the National Labor Relations Act (NLRA). Specifically, companies can no longer:

• Impose confidentiality clauses that prevent employees from disclosing the terms of their severance agreements.

• Enforce non-disparagement clauses that bar workers from discussing their employment conditions with third parties, including coworkers, unions, or the NLRB itself.

The ruling reverses previous decisions from 2020, which allowed such restrictive clauses. Now, severance agreements that force employees to waive their NLRA rights—such as the right to discuss workplace issues or assist coworkers—are deemed unlawful. This applies to both unionized and non-unionized private-sector workers, though it excludes public-sector employees, managers, and certain other groups like agricultural laborers or independent contractors.

Why Companies Use These Clauses

Historically, employers included confidentiality and non-disparagement clauses in severance agreements to protect their interests. These clauses served multiple purposes:

• Protecting sensitive information: Companies wanted to keep severance terms private to avoid setting precedents or revealing financial details.

• Controlling the narrative: Non-disparagement clauses prevented former employees from publicly criticizing the company, which could harm its reputation or brand.

• Avoiding legal risks: By requiring employees to waive claims in exchange for severance, companies aimed to minimize lawsuits over issues like discrimination or wrongful termination.

As employment attorney Alex Granovsky noted, “Companies are definitely incentivized to silence their departing employees… [to keep] all the skeletons in the closet.” But the NLRB’s ruling challenges this practice, prioritizing workers’ rights to free speech and collective action.

What This Means for Laid-Off Employees

For workers, this ruling is a game-changer. Here’s why:

• Freedom to Speak: Employees can now share details about their severance packages or discuss workplace conditions without risking legal repercussions or forfeiture of benefits. This transparency could empower workers to negotiate better severance terms or expose unfair practices.

• Retroactive Impact: According to a March 2023 NLRB memo, the ruling applies retroactively, meaning existing severance agreements with overly broad clauses may be unenforceable.

• Negotiation Leverage: Employees can push back against restrictive severance terms, especially if they believe they have legitimate claims against the employer, such as discrimination or unsafe working conditions.

However, the ruling doesn’t mean employees can say anything without consequences. Defamation laws still apply, and workers must be cautious about making false or malicious statements.

Implications for Businesses

For employers, the NLRB’s decision requires immediate action. Companies must:

• Revise Severance Agreements: Employers need to review and update severance contracts to comply with the ruling, ensuring clauses don’t infringe on NLRA rights. Failure to do so could lead to legal challenges.

• Rethink Layoff Strategies: Without the ability to enforce silence, companies may face increased public scrutiny during layoffs. This could affect their brand reputation, especially if former employees share negative experiences on platforms like Glassdoor.

• Navigate Negotiation Dynamics: The ruling may shift severance negotiations, as employees gain more power to demand better terms or reject restrictive clauses.

Some experts predict this could lead to more transparent corporate cultures, as “sunlight is the best medicine,” according to Granovsky. However, it may also complicate layoffs, as companies lose a key tool for controlling post-employment narratives.

Real-World Impact: Tech Layoffs and Beyond

The ruling comes at a time when layoffs are surging, particularly in the tech sector. In 2022 and 2023, companies like Google, Amazon, and Microsoft announced significant job cuts, with severance packages often tied to restrictive agreements. For example, Google offered laid-off U.S. employees 16 weeks of severance plus additional pay based on tenure, but such packages can no longer include broad gag clauses.

This change could amplify public discussions about layoffs, as seen in posts on X, where users have celebrated the ruling as a “victory for labor” and predicted “juicy” revelations from former employees. However, businesses may adapt by offering more generous severance packages to maintain goodwill or by including narrower, legally compliant clauses to protect sensitive information.

What Employees Should Do Next

If you’re facing a layoff, here are practical steps to navigate this new landscape:

• Review Agreements Carefully: Look for confidentiality or non-disparagement clauses in severance offers. If they seem overly restrictive, consult an employment attorney to assess their enforceability.

• Negotiate Terms: You may have room to negotiate better severance pay or benefits, especially if you’ve been with the company for years or hold a specialized role.

• Know Your Rights: Understand that the NLRA protects your ability to discuss workplace conditions or assist coworkers, even after signing a severance agreement.

The Bigger Picture: A Step Toward Transparency

The NLRB’s ruling reflects a broader push for workplace transparency and accountability. By removing barriers to free speech, it empowers workers to share their experiences, potentially exposing systemic issues like discrimination or unfair labor practices. This aligns with growing public demand for ethical corporate behavior, as seen in discussions on X about coercive employment practices.

However, the ruling’s long-term impact remains uncertain. Employers may appeal the decision or find creative ways to protect their interests, such as offering higher severance packages in exchange for voluntary silence. Meanwhile, employees must weigh the benefits of speaking out against potential risks to their professional reputation.

Conclusion: A New Era for Workers’ Voices

The NLRB’s decision to ban overly broad confidentiality and non-disparagement clauses in severance agreements is a significant win for workers’ rights. It gives laid-off employees the freedom to speak about their experiences and negotiate fairer terms, while forcing companies to rethink how they handle layoffs. As this ruling reshapes the job market, it’s a reminder that transparency can drive better workplace practices—but only if employees and employers adapt thoughtfully.

Thought Questions:

1. How might this ruling change the way companies approach layoffs in industries like tech, where public perception is critical?

2. Should employees always speak out about their experiences after a layoff, or are there risks to going public?

3. Could this ruling lead to broader changes in workplace transparency, such as stronger protections for whistleblowers?