Confidentiality and non-disparagement clauses in severance agreements are deemed unlawful.

In a major decision reversing at least two prior decisions, the National Labor Relations Board (NLRB) has determined that non-disparagement and confidentiality clauses in the separation agreement that an employer gave to its employees when they were laid off, violates Federal law. See McLaren Macomb and Local 40 RN Staff Council, OPEIU, Case No. 07-CA-263041 (NLRB, Feb. 21, 2023).

When entering into separation or settlement agreements, employers routinely require confidentiality or non-disclosure agreements, which restrict employees’ ability to disclose the terms of the agreement and sometimes restrict them from disclosing any facts leading up to their separation from employment, to anyone but their lawyers and accountants. Similarly, employers also often insist on non-disparagement language, which prohibit the former employees from saying anything negative about the company, or communicating their workplace grievances to others, and subjecting them to hefty penalties should they violate those clauses, which are typically effective for their rest of their lives. This decision calls into question the validity of that practice which, virtually always, provides more significant benefits to the employers than the employees.

The risk of a former employer having to pay a corporate employer’s legal bill for violating these clauses is a particularly harsh remedy that, if enforced, could well bankrupt a typical worker.

The Federal law in question, the National Labor Relations Act (NLRA) protects the rights of employees not only to form and join unions, but also to engage in “protected concerted activities,” which includes collaborating with others to improve terms and conditions of employment. These rights are called “Section 7 rights,” falling under Section 7 of the NLRA, and extend to nonsupervisory employees in non-unionized and unionized workplaces.

In the McLaren Macomb case, the NLRB concluded that employees have the right to use administrative, judicial, legislative, and political channels, or to publicize their issues in the media, or on the internet when there is an ongoing labor dispute, and that the non-disparagement and confidentiality clauses interfered with those rights.

The NLRB wrote that “inherent in any severance agreement requiring workers not to engage in protected concerted activity is the coercive potential of the overly broad surrender of NLRA rights if they wish to receive the benefits of the agreement. (p. 7)

An appeal will most likely be filed, and many interest groups will undoubtedly seek to intervene to submit “friend of the court,” or amicus curiae briefs. In the meantime, the employment law landscape will be altered. If employers continue to insist on nondisparagement and confidentiality clauses in their separation agreements with non-supervisory employees, they risk violating the NLRA and invalidating the entire agreement, yet it is often these clauses, in conjunction with the general release of rights to sue, which drives a settlement.

At this point, it would be wise for employers to immediately cease from including confidentiality and non-disparagement clauses in their separation or severance agreements.

Click -HERE to access the NLRB decision.

Court voids the Ulster County legislative district map.

Several residents of Ulster County brought a lawsuit against the Ulster County Commission on Reapportionment, to challenge the maps that were adopted on July 13, 2022, to redraw the 23 Ulster County legislative districts.

These districts are usually redrawn every ten years, after the release of the census figures, to respond to changes in populations throughout the county. The Commission is required to consider the "cores of existing districts, of pre-existing political subdivisions,

including cities, villages of towns, and of communities of interest," according to New York State Municipal Home Rule Law, which was recently amended in October 2021.

The changes to State law also required that populations of each county legislative district be as equal as possible, and with a difference in populations of the largest and smallest districts no more than 5% of the mean of each of the legislative districts.

On December 13, 2022, following oral argument, Ulster County Supreme Court Justice Kevin Bryant determined that the maps did not follow New York State Home Rule Law and that they are void. The Commission was ordered to meet and redraw the lines for the legislative districts to conform with State law, to hold a public hearing on December 27, 2022 and to adopt a new map by January 3, 2023. If this is not accomplished, the Court will appoint a Special Master.

Laura Wong-Pan, Esq. and Lanny Walter, Esq. represent the Petitioners.

Legal Update: Updates to NYS Court Uniform Civil Rules

Effective February 1, 2021, the New York State Court system has adopted a large-scale update to the Uniform Civil Rules for the Supreme Court and the County Courts. Some notable changes to the rules for civil practice include:

Meet and Confer Prior to Court Appearances, and Be Prepared

• Requiring counsel who appear before the Court to be fully prepared to discuss the case, or else can be subject to sanctions. Unbelievably, it has become common for some firms to contract attorneys who are uninvolved in the case and lacking any familiarity with the case, to appear in court. That will no longer be tolerated. (Section 202.1)

• Requiring Counsel to consult with one another before any preliminary or compliance conference, to talk about resolving the case and about discovery issues, rather than waiting for the Court to bring this up for the first time (Section 202.23)

• Court appearances are to be staggered, to minimize the time spent waiting for your case to be called (Section 202.23)

• Parties must make sure that all resolutions reached at discovery conference are memorialized in writing (Section 202.20-g)

Non-Presiding Justices Available for Settlement Conference

• Parties may request a settlement conference in front of a justice or judge other than the justice or judge who is presiding over the case (Section 202.29)

• When cases are settled, not only should the Stipulation be filed, but the assigned judge should be notified by email or telephone. (Section 202.28)

Limits on length of depositions and documents filed with the Court

• Absent Court Order, parties are limited to 10 depositions, and no more than 7 hours of depositions per witness (Section 202.20-b)

• Memoranda of law and affirmations are limited to 7,000 words and reply memoranda and affirmations are limited to 4,000 words (Section 202.8-b)

• 25-page Pre-trial memorandum will be required, ad well as an indexed binder of trial exhibits for each attorney, the court and for witnesses (Section 202.20-h)

Changes to Summary Judgment Practice

• Requiring a separation Statement of Material Facts to accompany motions for summary judgment (Section 202.8-g)

This is not a comprehensive list of all changes, but a brief summary. If you have any questions or need additional information, contact Laura Wong-Pan at 845-218-1288 (lwp@laurawongpanlaw.com).

This article should not be construed as legal advice or legal opinion with regard to any specific situation, but is presented for informational purposes only.