Recently, the National Labor Relations Board (“NLRB”) issued its decision in Prime Communications, LP, where the Republican-controlled Board refused to overturn its 2023 decision in McLaren Macomb, which held that employers cannot lawfully offer overly broad severance agreements, including confidentiality and non-disparagement provisions, that require employees to waive their rights under the National Labor Relations Act. The McLaren decision, however, remains controversial, and Trump-appointed members, James Murphy and Scott Mayer, remain “open to reconsideration of that precedent” when the Board attains a three-member majority to overrule it.
Prime Communications’ Impact on Employers
Today, the NLRB’s position with respect to severance agreements remains unchanged. Overly broad confidentiality and non-disparagement provisions in severance agreements are still likely to be found unlawful. In Prime Communications, where the current Board applied McLaren, the following provisions, in relevant part, were deemed unlawful
Employee agrees to refrain from making disparaging, defamatory, negative or other similar remarks concerning Prime … This non-disparagement provision is intended to be as broad as possible and to include the written publication of any information related to Prime, Prime’s business, Prime’s partners, owners, employees, agents, or services, whether true or untrue. Specifically, [employee] understands and agrees he is prohibited from calling, making personal contact with or, emailing any employee of Prime Communications at any location including Prime retail stores.
***
Employee promises that he will maintain in confidence the terms and existence of this Agreement and will not disclose the existence of this Agreement or its terms to anyone else, except to his spouse, tax advisor and/or attorney.
As a result, the Board ordered Prime Communications to rescind the overly broad language in the confidentiality and non-disparagement sections of the severance agreement, notify all affected employees, and post a notice for all current employees.
Employer-Friendly Changes Are Coming
Chairman Murphy and Member Mayer have stated that they remain committed to upholding Board precedent in the absence of a three-member majority. Because the Board is currently made up of two Republican appointed members and one Democrat appointed member, the Biden-era precedent is likely to remain unchanged for now.
However, changes are coming. On April 13, 2026, President Trump nominated James Macy, a current Department of Labor official, to fill a vacant seat on the Board. While Macy’s confirmation will likely take months, employers can expect that if and when Macy is confirmed and the Board has filled a third majority seat, precedent such as McLaren Macomb and Prime Communications will be swiftly overturned.
For now, employers should continue to offer severance agreements consistent with the Board’s decision in McLaren.
