Two major developments concerning the National Labor Relations Board (“NLRB”) are unfolding. In particular, these developments shed light on the uncertain future of the important McLaren Macomb^[1] decision and employers’ ability to include confidentiality, non-disparagement, and restrictive covenants in severance agreements.

First, on February 14, 2025, William B. Cowen, the acting General Counsel for the NLRB issued a memorandum (GC 25-05)^[2] that rescinds dozens of previous memoranda, many of which have direct implications for businesses and employers. This move may have major implications regarding the scope and enforceability of severance agreements, among other things.  

Second, on March 6, 2025, a federal court reinstated Gwynee A. Wilcox as a member of the NLRB after the Trump Administration, in an unprecedented move, fired Wilcox before the expiration of her term. Currently, the NLRB has a democrat-appointed majority and is similar to the board composition that issued the controversial McLaren Macomb decision.

What is the NLRB and why should a non-unionized workplace be concerned?

The NLRB is an independent federal agency which primarily acts to prevent and remedy unfair labor practices committed by private sector employers and unions. The NLRB was created through the National Labor-Relations Act (“NLRA”) in 1935. The NLRB is composed of up to five members appointed by the President, but subject to confirmation by the senate, each of whom serve staggered five-year terms. There must be at least three Board Members for there to be a “quorum.” The NLRB also has a General Counsel, who functions independently from the Board. The General Counsel determines whether to prosecute certain cases and provides legal guidance on interpretations, but the Board actually adjudicates the cases that the General Counsel brings.

The NLRB is empowered to provide protection to acts called “protected, converted activity” (“PCA”). Normally, this refers to non-management employees being able to discuss wages, terms and conditions of employment, organize or encourage walk-outs, and other things of that nature. It is well established that these protections apply to non-union employees.

The McLaren Macomb Decision and GC 23-05

But, what even is a General Counsel Memorandum? General counsel memoranda are not binding like Board decisions, but rather signal how certain labor issues will be addressed or analyzed under a given presidential administration. Basically, it is a policy memorandum that signals how the General Counsel’s office will be inclined to analyze situations. 

McLaren Macomb overturned previous precedent and held that even offering severance agreements that broadly prohibited employees from making statements that could disparage or harm the image of the employer and which prohibit employees from discussing the terms of the severance agreement were unlawful. You can read more about this decision in our previous article. This decision had major implications for employers who may have used or planned to use such provisions.

Further causing consternation was GC 23-05, where former GC Jennifer Abruzzo affirmed that the NLRB would apply McLaren Macomb in the NLRB’s prosecutorial functions and strongly suggested that the decision could be expansively applied to various restrictive covenants (non‑solicitations, non-competes, and no-poaching provisions) in anything from employment agreements, to offer letters, and even to pre-employment communications.

What does it mean now that previous memoranda have been rescinded?

Acting General Counsel Cowen has rescinded dozens of memoranda from the previous administration, including the aforementioned GC 23-05. This signals that GC Cowen will likely view issues such as non-competition agreements, severance agreements, and student athletes, among other things, differently than GC Abruzzo did and not interpret McLaren Macomb as liberally.

These rescission took place after the Trump Administration had originally dismissed Member Wilcox, leaving the board without a quorum and presumably open for Trump appointees. Now that Wilcox has been reinstated (for now, this may change on appeal), the current board would likely not be inclined to overturn McLaren Macomb. However, President Trump may appoint new members that could tip the scales.  

For now, offering confidentiality and non-disparagement in severance agreements may still be unlawful under McLaren Macomb, but the scope of that decision may be more limited than it was under the Biden administration; directly affecting the lawful scope of severance agreements.   

Again, these memoranda are non-binding. Employers should have privileged communications with their legal counsel to discuss how they might change their practices moving forward during this administration.

Stay alert for more updates as the composition of the NLRB changes and the Board once again is able to adjudicate cases.

^{[1] McLaren Macomb and Local 40 RN Staff Council, Office and Professional Employees, International Union (OPEIU), AFL-CIO. Case 07-CA-263041. February 21, 2023.}

^{[2] Source: https://www.nlrb.gov/news-outreach/news-story/gc-25-05-rescission-of-certain-general-counsel-memoranda.}

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