a California Employment Lawyer's Blog

Attacks on Restrictive Covenants in Severance Agreements

When the US government agency and National Labor Relations Broad attacks what has been fairly standard language in severance and release agreement it’s worth noting. 

Promises are promises, but there as some promises that should never be asked for at the end of an employer-employee relationship.  Although these prohibitions have yet to be written into law, or sufficiently tested in the courts, it’s in the wind; are here are some examples of the direction this wind is blowing:

Confidentiality:  Demanding absolute confidentiality deprives former employees of their rights to complain to government agencies and collaborate with other employees to uncover unlawful wage and unfair labor practices;

Non-Disparagement: Former employees who are required to promise non-disparagement may be denied their rights to complain to federal and state agencies with respect to unlawful employment practices;

Non-Solicitation:  In states that prohibit non-compete agreement (like California), non-solicitation of employees (anti-raiding) clauses my infringe upon employee mobility, which violates public policy considerations. Further, the NRLA may find fault with general non-solicitation clauses as interfering with and employee’s rights to engage in protected concerted activity.

Overbroad Separation & Release Agreements: The EEOC is concerned about these over drafted, 8-15 page separation agreements that need a legal team to decipher. Specially, the EEOC announced it would attack restrictive covenants and releases that don’t carve out exceptions to the former employee to participate in EEOC filings and investigations post-employment.
The National Labor Relations Board and National Labor Relations Act it enforces are not just protection for union employee, it protects a much broader workforce, much like the EEOC; covering almost all private, non-agricultural, employee-workers. It will be a dramatic change in employer practices if these entities take an active rule in defined what are permissible promises an employer is allowed to ask for in a final agreement.  
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