When most people think about the National Labor Relations Board (NLRB)…well, most people don’t think about the NLRB. But when people do, the first things to come to mind are union strikes; collective bargaining agreements; and workers who spend their days on the manufacturing line. But in fact, the NLRB and the National Labor Relations Act that it enforces provides protections to all (non-supervisory) workers.

Last year, the NLRB issued a decision in the case of McLaren Macomb which called into question the enforceability of non-disparagement clause. And then in March 2023, the General Counsel of the NLRB published an opinion providing additional clarity. Which brings us to an important development in employee relations.

Let’s start with defining a non-disparagement clause. Our lawyer friend is fond of calling this the “Golden Rule Clause” – that is to say, a clause which provides that if you don’t have anything nice to say, don’t say anything at all. Employers often include these clauses in separation, severance, and employment agreements. They may also be found in employee handbooks and incentive plans. At times, the clause is mutual. The purpose of these clauses is to prevent a party from being put in a negative light. A company’s reputation is important for both customers and potential employees. A non-disparagement clause will provide some protection from negative talk from angry ex-employees.

In the McLaren Macomb case, the McLaren Macomb hospital included a non-disparagement clause in its severance agreement with several staff members. The NLRB held that the clauses were overly broad. The General Counsel’s memo then went on to clarify that in nearly all cases, a non-disparagement clause is overly broad and in violation of Section 7 of the National Labor Relations Act. Section 7 guarantees non-supervisory employees the right to, among other things, “engage in other concerted activities for the purpose of… mutual aid or protection.” In essence, the General Counsel’s memo clarified that McLaren Macomb held that non-disparagement clauses may prevent an employee from making statements to the NLRB or other employees about working conditions. And as such, the clauses are unenforceable.

The most interesting part of the General Counsel’s memo is that the McLaren Macomb decision is retroactive. Meaning, not only are companies disallowed from including non-disparagement clauses in the future, but they must also inform former employees that previous agreements are no longer enforceable.

So how does this decision impact a diverse workforce in particular?

A non-disparagement clause discourages employees or former employees from giving negative information about their company or experience with a firm. This can lead to an endless cycle of companies being hostile to a diverse workforce, separating employees who don’t “fit the culture”, but never being held accountable because the exiting employees are barred from speaking about their negative experience. With a ban on non-disparagement clauses, former employees may speak freely about their experience. More information can lead to change – be it a change in culture, policies, or management.

To date, the General Counsel’s memo hasn’t been tested in a new case. There is a possibility that the McLaren Macomb decision can be overturned. But for now, Golden Rule Clauses are out, and speaking (truthfully and) freely is in.