Question:
When I quit my job, my former employer bought my silence. They paid me ten thousand dollars to not talk about how their corrupt little group of three senior “leaders” ran their company. These three lied daily to their employees; I collected the proof and threatened to blow the whistle.
As just one example, they told me for almost two years I deserved a great deal more money and they’d raise my salary as soon as they were able, but they couldn’t afford it. They said no one was getting raises and business reversals had resulted in each of them dramatically reducing their own salaries. I learned several of their “pet” employees were getting raises and I also came across a non-encrypted document that showed each of these three received more than half a million dollars in annual compensation.
They elected to pay me off. In exchange for the ten thousand dollars, I signed a severance agreement with a confidentiality and non-disparagement clause. At the time, I just wanted to sever relations with them, and the money they offered felt reasonable as it equaled the compensation I should have received in raises. Afterwards, however, I felt guilty that I hadn’t told my coworkers what I’d learned. I’ve heard this confidentiality clause no longer binds me. I’d love to let my former coworkers know everything. Can I or would I be taking a risk?
Answer:
On February 21st, the National Labor Relations Board (NLRB) ruled that non-disparagement and confidentiality provisions in severance agreements are unlawful, https://www.calfee.com/newsletters-602#:~:text=On%20February%2021%2C%202023%2C%20the,Labor%20Relations%20Act%20(NLRA).
According to the NLRB, when employers make employees agree to confidentiality and non-disparagement clauses in exchange for severance dollars, they unfairly restrict their employees’ National Labor Relations Act rights. The NLRA’s Section 7 guarantees employees the right to share information about their workplace and otherwise engage in concerted activities for mutual aid and protection. This section would give you permission to tell your coworkers what your leaders were doing.
On March 22nd, the NLRB’s General Counsel issued a follow-up memorandum stating that she interprets the Board’s decision as applying to agreements already signed. Her memorandum additionally notes that employers risk an unfair labor practice charge when they enforce “a previously entered severance agreement with unlawful provisions.”
The NLRB decision also stated that employees’ rights aren’t limited to discussions with coworkers and don’t depend on the current existence of an employer/employee relationship. Given this, you might ask an attorney to look at the exact wording of your agreement and let you know whether you can safely tell others what you know about your former employer.
Here are three caveats. The NLRA’s protections don’t extend to supervisors. Agreements with confidentiality clauses narrowly tailored to restrict former employees from disseminating proprietary information and trade secrets information may still be lawful. Additionally, narrowly tailored non-disparagement clauses that prohibit “maliciously untrue” defamation made with “knowledge of their falsity or with reckless disregard for their truth or falsity” may be legal.
Finally, you need legal advice for two reasons. Agreements that contain confidentiality and non-disparagement clauses that are limited in duration and scope might be enforceable. You also need to exercise caution in what you say, or you might find yourself defending against a defamation lawsuit. If, however, a lawyer says, “go for it,” your former coworkers and your former leaders will learn a lot.
(c) 2023 Lynne Curry
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This was a great read! My reaction upon reading it was that usually it seems that the law will mostly do as it’s headlined to do, but there can be some narrowly argued exceptions, and some of these might somehow apply to the poster’s situation. And I was right! Of course, when all else fails, the employer may turn to retaliation, blacklisting, secret whispering campaigns, and the like–all of which are (a) hard to document, (b) hard to prove, and (c) often discounted. Thank you for bringing this issue and its implications to our attention.
Exactly, Susan, this generally means good things for employees and ex-employees and it’s challenging news for employers. At the same time, there are important caveats.
At a company Holiday Party they had a ‘fun questionnaire’ game. One of the questions was “Who is the most likely to ‘call it/tell it like it is?’ It was literally unanimous – I won.
In a situation like this, I’d be hard-pressed to have held my silence as long as he did.
It’s good that the Feb 21 ruling came out – no one should be above the law, and no one should be penalized with reporting real unlawful activities.
Kind of know what You are saying. I once spent a substantial amount of time (months) and my own money on a campaign for an individual who I thought would be good for a political position. I had no aspirations for a job however, so after this person won, I traveled to the Lower 48 to visit my Father, other relatives, and college and childhood friends. My Father got a call at his business (pre cellphone; evidently looked up by them) from one of the campaign workers saying that when I got back there would be a position waiting for me. After returning, I let the caller know I was back in town and was assured I would receive a call back. Never happened. I ran into the campaign manager a month or two later. After some small talk, I mentioned the call my Father had received and the lack of follow up. He slowly looked around and then said, “Your trouble is you’re too damn honest”. His face got red as he said this, and he turned and quickly walked away. I was actually happy not to work for a group that thought honesty was a liability (to them). What really bothered me was that my Father had to tell His friends I didn’t have a position when they inquired.
Your stories are great, Larry.
Dan, love it! I can imagine you were voted most likely to tell it like is. Am alsways glad when add your thoughts to the articles.
Well, I could identify with Dan and employees who find out that those whom they are working for/with or others they had faith in turn out to be otherwise…. Needless to say, I never looked at that individual or those chosen by that individual in a favorable light afterwards.