94 HR Magazine June/July 2017
receive, employers generally have broad discretion
here. Nearly all organizations base severance on years
of service, according to a 2014 Worldat Work survey,
although some also take into account factors such
as an employee’s position, pay and whether there is
an employment contract in place. No matter what
approach you take, the most important thing is to
“You want to be careful about giving different sev-
Want to Silence Former Workers?
erance terms when performing a group separation,”
says attorney Kristin Michaels of McDermott Will &
Emery in Chicago. “Otherwise an employer can open
itself to a claim that it has acted discriminatorily.”
The policy at Dovel Technologies allows for flex-
ibility in details such as last day, how the announce-
ment of an employee’s departure is made and, in cer-
tain instances, the details of a noncompete clause, but
the company leaders are careful to ensure that they
are adhering closely to the terms of the arrangement.
The NLRB Has Something to Say About That
When showing a worker the door,
employers often try to neutralize the
situation by offering money or perks in
exchange for a promise that the worker
won’t file a legal claim, badmouth the
company or cause other problems.
But there’s a catch. Section 7 of the
National Labor Relations Act (NLRA)
guarantees employees the right to act
together to try to improve their pay and
working conditions and prohibits organizations from interfering with people’s
ability to exercise that right. To many
employers’ surprise, the law applies
whether or not workers are unionized.
Severance packages that ignore NLRA
provisions may result in lengthy and
Here are some common traps—and
tips for avoiding them.
Blanket waivers are a red flag,
says Harold Datz, a labor law professor
in Washington, D.C., and retired chief
counsel at the National Labor Relations
Board, which adjudicates NLRA com-
In fact, steer clear of any provision
that requires employees to waive their
right to file a claim in exchange for
receiving severance pay or other benefits, he says. “The law is pretty well-established when it comes to employers requiring workers to sign away their
right to concerted activity,” Datz says.
“Generally speaking, it’s illegal.”
must not be so broad that they prevent workers from acting collectively,
according to attorney Kristina Spitler of
Vanderpool Frostick & Nishanian PC in
Confidentiality provisions could
violate the NLRA if they could rea-
sonably be interpreted as prohibiting
employees from discussing the terms
of their severance or other workplace
matters with their co-workers, Datz
says. Of course, many employers
would prefer that workers didn’t share
information about their pay and ben-
efits with their co-workers. But having
policies that prohibit such dialogue is
looking for trouble.
Nonsolicitation clauses could
run afoul of the NLRA if they are overly
broad, according to Datz. Even if a
company’s main concern is preventing
former employees from stealing away
staff, these types of provisions could
be illegal “if they could be interpreted
as blocking workers from soliciting
their co-workers to join in opposition to
wages or working conditions,” he says.
Employers can avoid NLRA prob-
lems by including a clause in their
severance agreement clarifying that
nothing in the pact should be construed
as requiring a waiver of any rights guar-
anteed by law, Datz says. However,
such a provision must be set forth in a
prominent place in the agreement and
not buried in the fine print.
agreements set a
of two weeks’ pay.
at least one
Source: Worldat Work, Severance and Control Plans (2014).