New law prevents companies from silencing former employees, but may not go far enough

In late 2022, a 28-year-old tech worker named Kim was laid off from her job at a start-up. “My severance offer was pretty generous, but in order to get it, I signed a long agreement basically saying that I wouldn’t talk about anything that happened while I was at the company,” explains Kim, who withheld her last name to protect her employment security. “It was presented to me as a simple protocol – a document that everyone who left had to sign – and I didn’t really think about it too much.”

However, since she signed that document, the conditions surrounding these common non-disparagement clauses have changed. In February, the US National Labor Relations Board (NLRB) announced that most companies could no longer prohibit workers from publicly sharing negative remarks about their former employers. The federal agency also determined that employers could not stop a former worker from sharing the size and nature of a particular severance deal.

This law, designed to protect workers’ ability to publicly share the terms and conditions of their severance package, has been hailed as a victory for employee rights. Indeed, the decision goes some way toward establishing transparency in corporate culture.

Yet employment experts and former employees alike are skeptical of how much this will actually address the existing culture of secrecy that allows discrimination and other forms of misconduct to persist. First, there are many exceptions to the rule. And second, fear of speaking out against an employer – and being branded unemployable as a result – is so ingrained in today’s labor-market culture that the law itself might not actually change the situation as intended.

A “sea change”?

For decades, US employers have been inserting terms into severance agreements to prevent departing workers from disclosing information, such as trade secrets or sensitive data. In recent years, however, some employers have broadened those provisions, waiving employees’ rights to disclose anything deemed potentially disparaging or confidential – even allegations of discriminatory practices, harassment, or an unsafe work environment.

In 2020, the NLRB made the decision that forcing employees to waive their right to speak out in order to receive severance was legal. Since then, however, the new members comprising NLRB leadership have shown a more worker-friendly outlook – leading to last month’s move, which overturned the 2020 decisions.

While some have hailed the NLRB decision as a victory for workers’ rights, others have had a more tempered reaction. Legal experts and individuals who have been laid off and felt unable to speak out about the terms of their severance are concerned that, in reality, it won’t change much. “It certainly will make a difference to some workers,” says Tom Spiggle, an employment lawyer based in Virginia, “but it probably won’t represent a sea change.”

One core reason, according to legal experts, is that there are a variety of workers and organizations that the ruling exempts. Federal, state, and local government agencies, including public schools, libraries, and parks, do not fall under the NLRB’s jurisdiction. Railways and airlines are also exempt.

Another issue is that certain categories of workers are unlikely to be covered by the ban, such as independent contractors, agricultural and domestic workers, and any individual employed by a parent or spouse. However, one of the most significant exceptions is that supervisors, a widely defined term for anyone who hires employees or sets pay, are also not covered.

But even for workers to which the law applies, the NLRB’s move may not be sufficient to encourage them to speak up. “Workers are often inhibited from criticizing a former employer even without any legal or contractual constraint,” says Cynthia Estlund, a professor of law at the New York University School of Law. “The NLRB decision will only remove one source of inhibition,” she adds. In other words, while laid-off workers no longer have to agree not to disparage their former company in order to receive severance, the new decision may not be enough to change the existing precedent that publicly speaking out against a former employer is taboo.

Author and HR consultant Sarah Aviram agrees. “When it comes to employees sharing their experience with their former company, they seem to be following an important unspoken rule: praise in public and protest in private,” she says.

Laid-off tech worker Kim has criticized her former company’s culture as being “sexist”. Although she acknowledges the NLRB ruling as a positive step for workers’ rights, she says she would not have spoken publicly about her experience even if the ruling had been in place when she was laid off. She emphasizes that being labeled a “complainer” or a “troublemaker” would have made it difficult to find a new job, especially during a period of mass layoffs.

According to HR consultant Sarah Aviram, laid-off employees tend to focus on finding new employment rather than publicly airing their grievances, especially during times of economic uncertainty. It remains to be seen how companies will react to the new ruling, which Tom Spiggle notes is a significant departure from the nearly ubiquitous inclusion of non-disparagement agreements in severance packages. The ruling may have a gradual impact on the balance of power between employees and employers, although it is uncertain whether workers will be emboldened to speak out. Kim is hopeful that the ruling will lead to better treatment of workers and an overall decrease in negative social media exposure for bad bosses.