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Post-employment confidentiality

For business owners, one of your main goals is avoiding unneeded expenses. This can include many expenses, but one primary expense that all businesses seek to avoid is litigation expenses. And, one way that business owners do this, especially during layoffs, is through severance agreements. Unfortunately, these Houston, Texas, agreements are not so iron clad anymore.

Confidentiality clauses

Part of these severance agreements are usually broadly written confidentiality clauses that bar former employees from disparaging their former employers. They also prohibit former employees from discussing the terms of their severance or the nature of their departure among many other aspects of their employment. In fact, some confidentiality clauses prohibit even saying that the former employee even worked for the employer in the past.

And, in exchange for these broadly written confidentiality clauses, employees are paid handsomely. Indeed, this has been a Houston, Texas, industry practice for decades.

Endorsed practice by the NLRB

In fact, the National Labor Relations Board actually endorsed the business practice of utilizing such broadly written confidentiality clauses in severance agreements. In the prior administration, they found that these were perfectly legal under Sections 7 and 8(a)(1) of the National Labor Relations Act.

However, that changed in February of this year under the newly empaneled Board. They are now illegal until the Board’s February decision is overturned by another empaneled Board or a federal court.

What does this mean?

In practice, this means that you may notice that your former employees may begin speaking about you and your business practices online and in other media. And, it may not always be flattering. Also, even for those businesses that have already paid these former employees to keep quiet, they may have little recourse inside the bounds of these severance agreements.

What can be done?

Remember, any litigation you bring will likely result in publicity, which can bring its own set of problems. However, your may have legal options outside of your severance agreement, depending on what your former employee is saying. But, you will need to consult your Houston, Texas, outside or general counsel.