Salvina Obtains Settlement In One Of The First NLRB Settlements Nationwide

Attorney Benjamin Salvina of Marzzacco Injury Law recently obtained an unfair labor practice settlement for a client who had been forced to agree to illegal terms as a condition of his severance after he was laid-off by his former employer.

This settlement is public and represents one of the first such settlements in the United States.

Our client was employed as a Packer and later in his employment as an Engineering Technician for an international, multibillion-dollar pharmaceutical containment and delivery corporation at its pharmaceutical packaging manufacturing facility in Lebanon, Pennsylvania. Prior to getting laid-off, our client was a dedicated employee for almost 26 years. On March 31, 2023, the corporation laid-off our client, along with dozens of other hardworking employees at the Lebanon facility. The corporation offered a severance; however, to receive the severance, the employee was forced to agree to non-disparagement and confidentiality terms—which had been ruled illegal by the National Labor Relations Board (“NLRB”) in February 2023 in a widely publicized decision.

In February 2023, the NLRB issued a landmark decision that overruled prior precedent and held that the National Labor Relations Act (“NLRA”) prohibits an employer from including a non-disparagement or confidentiality clause in a severance offer to a recently separated employee. The NLRB ruled that requiring employees to agree to these clauses to obtain severance pay unlawfully burdened the rights of employees to engage in concerted, protected activity.

In July 2023, the NLRB approved the settlement that our client reached with his former employer. This settlement required the corporation to physically post a notice in its Lebanon facility, and mail or email a notice to all former employees who were employed at the Lebanon facility on or after March 31, 2023: (1) informing its employees of their rights under the NLRB; (2) agreeing to not put confidentiality or non-disparagement clauses in any severance agreements; and, (3) stating that the corporation is rescinding these illegal terms in all severance agreements that were offered to laid-off employees on or after March 31, 2023. The corporation also must require all of its managers and supervisors at its Lebanon location to attend mandatory training with the NLRB.

Our client’s settlement represents a big win for employees who are laid off and presented with the difficult choice of either accepting severance and agreeing to unlawful confidentiality and non-disparagement terms or forego the severance completely.

Attorney Salvina said of the settlement and its impact on the company’s ability to force employees to accept a gag order as a condition of a severance offer, “Companies have continued to brazenly include confidentiality and non-disparagement clauses in severance agreement despite the NLRB’s clear message that these terms are unlawful under the NLRA. This settlement will help dissuade companies from continuing to ignore the NLRB’s command and to instead follow the law.”

You can obtain information about our client’s settlement by going to the NLRB’s website at https://www.nlrb.gov and searching for case number 04-CA-316902. If you have been laid-off or terminated by your employer and need advice on the terms and legality of your severance agreement, please contact our employment lawyer in Lebanon at cmarzzacco@klnivenlaw.com or (717) 995-8963.