Developments in the Law-Employee Handbooks and Separation Agreements

How to Create An Employee Handbook | Small Biz Ahead

Along with the election of a new President in 2020 came the appointment of a new National Labor Relations Board (NLRB) General Counsel. In line with how many federal agencies work, the appointment of a new General Counsel often brings numerous adjustments to the law and doctrinal shifts, including overruling legal precedents that were in place during a previous administration. Two such expected changes in the law involve 1) employee handbooks, and 2) confidentiality and non-disparagement provisions in employee separation agreements.

Employers should expect significant modifications in the law regarding the enforceability of certain provisions commonly found in employee handbooks. Employee handbooks commonly include confidentiality rules, non-disparagement rules, social media rules, media communication rules, civility rules, rules requiring respectful and professional conduct, and offensive language rules. For those rules that could be interpreted as infringing on employees’ rights to engage in protected concerted activities (employees’ rights to act with co-workers to address work-related issues), the new General Counsel of the NLRB is seeking to shift much of the burden back onto employers, even when the rules seem facially neutral, to prove that the rules do not infringe on employees’ rights. If a “reasonable employee” believes that the rule is infringing on his or her rights to engage in protected concerted activity, the General Counsel of the NLRB likely will consider striking those rules. Employers therefore should expect much greater scrutiny of their handbooks and should consider revising or removing certain provisions currently in their handbooks.

The enforceability of certain “employer friendly” separation agreement provisions and confidentiality rules will also likely be reconsidered. Under the prior administration, separation agreements that contained confidentiality and non-disparagement clauses were by and large found to be lawful. For example, the NLRB upheld a provision in a separation agreement prohibiting a departing employee from making any public statements detrimental to the business or reputation of the employer. In the near future, however, such a provision will likely be found unenforceable. With respect to confidentiality, the NLRB determined during the previous administration that a confidentiality provision in an arbitration agreement prohibiting the disclosure of evidence outside of the arbitration proceeding or of the arbitration award itself was valid. However, that holding is likely to be overturned during the current administration. As such, employers will need to consider revising certain portions of their employee separation agreements.

Other changes in the law are on the horizon as well. As always, should you have any questions regarding the impact of employment issues on your business, please do not hesitate to contact your Levin Ginsburg attorney.

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