On April 13, President Trump nominated James Macy to be a member of the National Labor Relations Board (NLRB) for a five-year term. Macy's confirmation to the NLRB by the Senate would cement a Republican majority on the NLRB, and such a shift could bring with it the overturning of employment rulings by the NLRB during the Biden administration.
McLaren Macomb and the NLRB's Current Approach to Severance Agreements
One Biden-era NLRB position at risk of being overturned is a ruling that held that the inclusion of non-disparagement and confidentiality provisions that were not narrowly tailored in severance agreements interfered with, restrained, and coerced an employee from exercising their rights under Section 7 of the National Labor Relations Act (NLRA).
Section 7 of the NLRA protects the right of employees to engage in concerted activities relating to wages, hours, and working conditions. As discussed here, in 2023, the Biden-era NLRB ruled in McLaren Macomb that an employer-provided severance agreement containing confidentiality and non-disparagement provisions violated the Section 7 rights of employees because such provisions tend to interfere with, restrain, or coerce an employee's ability to exercise their Section 7 rights.
The non-disparagement clause at issue in McLaren provided that the employee would not make statements that "could disparage or harm the image of the Employer, its parent and affiliated entities and their officers, directors, employees, agents, and representatives." Additionally, the confidentiality clause at issue in McLaren provided that the employee could not disclose the terms of the agreement to anyone except for their spouse or a professional advisor.
The NLRB held that the mere proffer of a severance agreement like the one at issue in McLaren that conditioned the receipt of severance benefits on those limitations violated the NLRA because it unlawfully interfered with the employee's Section 7 rights. McLaren overturned two NLRB decisions from the first Trump administration NLRB—Baylor University Medical Center and IGT d/b/a International Game Technology—in which non-disparagement and confidentiality provisions that, among other things, contained language in which the employee agreed not to "pursue, assist, or participate" in any claims against their employer were found to be enforceable absent a showing of illegal animus or other coercive or unlawful conduct by the employer.
Ultimately, in McLaren, the NLRB held that the absence of coercive or unlawful conduct by the employer as identified in Baylor and IGT could not save confidentiality and non-disparagement provisions that otherwise contained language that restricted an employee's ability to exercise their Section 7 rights.
Shortly after the McLaren ruling, on March 22, 2023, then NLRB general counsel Jennifer A. Abruzzo issued General Counsel (GC) Memorandum 23-05 purporting to clarify that McLaren did not per se ban severance agreements containing confidentiality and non-disparagement provisions. Neglecting decades of law in the area and that the existence of a trade secret is not time dependent, Abruzzo described that narrowly tailored confidentiality provisions that restrict the dissemination of proprietary or trade secret information for a period of time based on a legitimate business needs may be lawful. Arguably rewriting defamation law to comport with the standard created by the Supreme Court relating to public figures, Abruzzo explained that a non-disparagement provision that is limited to employee statements about the employer that are "maliciously untrue, such that they are made with knowledge of their falsity or with reckless disregard for their truth or falsity" may be lawful.
Signs the NLRB May Reconsider McLaren Macomb
The current administration may be taking steps to pull the standards back to those that existed prior to GC Memorandum 23-05 and McLaren. On February 14, 2025, William B. Cowen, then NLRB acting general counsel, issued GC Memorandum 25-05 rescinding certain NLRB general counsel memoranda, including Abruzzo's 2023 memorandum on McLaren. Cowen's recissions of GC Memorandum 23-05 suggest that confidentiality and non-disparagement provisions in severance agreements are not a priority for the current NLRB.
Nevertheless, McLaren currently remains the standard followed by the NRLB and NLRB administrative law judges (ALJs) alike because GC memoranda are not binding. As recently as May 2026, in Detrex Corporation, the ALJ disagreed with Detrex's position that McLaren should be overruled and, relying on McLaren, found that the confidentiality and non-disparagement provisions in a severance agreement were not narrowly tailored to prevent violating the employee's Section 7 rights.
There, the confidentiality provision found to be unlawful provided that the employee could not "at any time" reveal "confidential and proprietary information," but it did not define "confidential information." The unlawful non-disparagement provision prohibited "any disparaging or defamatory remarks" about any of the released parties with no temporal limits and without tailoring the provision to allow communications that are "not so disloyal, reckless, or maliciously untrue as to lose the Act's protection."
Notably, in Prime Communications, LP, an April 2026 decision, the NLRB signaled that change could be on its way. In Prime, the board upheld an ALJ's decision that relied on McLaren to hold that a severance agreement's non-disparagement provision unlawfully restricted an employee's Section 7 rights. Importantly, chairman James R. Murphy and member Scott A. Mayer noted that they applied McLaren because it is precedent. However, they stated that "[t]hey would be open to reconsideration of that precedent in a future appropriate proceeding, but, in the absence of a three-member majority to overrule it at this time, they agree to apply it . . . ."
Murphy and Mayer are referring to the votes needed to overturn existing NLRB precedent. Currently, the NLRB comprises two Republicans and one Democrat. If confirmed by the Senate, Macy would cement the Republican majority on the NLRB, such that the Biden-era NLRB decision in McLaren could be overturned as intimated by Murphy and Mayer's willingness to revisit McLaren.
What Employers Should Know About Severance Agreement Compliance
In addition to the changing federal landscape of Section 7 rights in relation to non-disparagement and confidentiality provisions, employers should be aware that state laws increasingly may have certain prohibitions on what provisions can be included in severance agreements. Thus employers are strongly encouraged to have counsel review their proposed severance agreements.
The authors of this article will continue to follow any developments related to the NLRB's view on Section 7 rights. If you're an employer seeking help developing compliant severance agreements, please contact anyone in Venable's Labor and Employment Group.