Settlement Agreements and the NLRB: The Picture is Not as Bleak as Originally Thought 

As we have noted in previous updates, the National Labor Relations Board (NLRB), in the McLaren decision, took the position that confidentiality provisions and non-disparagement provisions in severance agreements violate Section 7 of the National Labor Relations Act (NLRA). Section 7 gives employees the right to discuss the terms and conditions of their employment, including pay, without reprisal from their employers. It applies to both unionized and non-unionized work forces. In McLaren, the NLRB stated that confidentiality and non-disparagement provisions in severance agreements violate Section 7. Parsons’ attorneys recently settled a dispute for a client under the NLRA and, in crafting the settlement agreement, obtained insight into how the Denver regional office of the NLRB interprets the McLaren decision.

First, regarding confidentiality provisions, the NLRB will not approve provisions that prohibit employees from discussing the existence of a settlement agreement. However, employers can require employees to keep the financial terms of the settlement, specifically the settlement amount, confidential.

Second, regarding non-disparagement provisions, employers may include in a severance agreement provisions that prohibit an employee from stating untruthful things about their employer with “a malicious motive” or from making statements “with knowledge of their falsity or with reckless disregard for their truth or falsity.” Admittedly, demonstrating that a former employee acted maliciously in making untrue statements about their employer is a high hurdle to clear. But a provision with such caveats is potentially better than no provision at all!

As we have previously recommended, if you have not done so already, be sure to update your severance agreement forms to address these recent developments from the NLRB.

Mouse House Civil War: Governing Board Abandons DEI

In the ongoing battle between Florida Governor Ron DeSantis and Walt Disney World, the new board of Disney’s governing district – whose members were all recently appointed by Governor DeSantis – abolished its diversity, equity, and inclusion programs. The board found, based on an internal investigation, that the board’s DEI programs “implemented hiring and contracting programs that discriminated against Americans based on gender and race, costing taxpayers millions of dollars.”

“The so-called diversity, equity, and inclusion initiatives were advanced during the tenure of the previous board and they were illegal and simply un-American,” according to district administrator Glenton Gilzean. “Our district will no longer participate in any attempt to divide us by race or advance the notion that we are not created equal.”

Employers have been scrambling to evaluate their DEI policies in light of the Supreme Court’s decisions prohibiting affirmative action in university admissions, discussed in a previous update here. While the Supreme Court’s recent decisions relating to university admissions do not directly impact employment law, the likelihood of a legal challenge to companies’ DEI programs on the grounds that such policies constitute reverse discrimination has significantly increased. District Administrator Gilzean’s comments preview what are likely to be the grounds for such a claim. As we have previously noted, the Equal Employment Opportunity Commission has stated that the Supreme Court’s university admission cases do not apply in the employment context or to companies’ DEI policies. This will be small comfort to an employer sued for reverse discrimination because of its DEI policies.

To minimize the risks of such a claim, employers implementing DEI policies should avoid hiring “quotas.” Instead, DEI policies should be focused on outreach to certain populations as part of an overall recruiting strategy. Among other things, companies should not create or set aside job openings that are only available for applicants of a specific race or gender or offer a training program that is only available to specific groups of employees. And, as always, companies should have their DEI policies reviewed by counsel on a regular basis as the law on this issue is ever changing.

Hot Off the Presses! New Pregnancy Accommodation Rules Proposed and the New Law Covers More Than You Think

On Monday, the EEOC issued proposed regulations to implement the Pregnant Workers Fairness Act, passed by Congress in late 2022. The Act requires employers to make reasonable accommodation and adjustments in the workplace if necessary to enable pregnant employees do their job. Beginning Aug. 11, 2023, the public will have 60 days to comment on the proposed rules.

The proposed rules identify four accommodations that should be granted in almost every circumstance: allowing covered employees (1) to have extra time for bathroom breaks; (2) to have food and drink breaks; (3) to drink water on the job; and (4) to sit or stand as necessary.

The Act requires employers to make accommodations “related to the pregnancy, childbirth, or related medical conditions of a qualified employee, unless [the employer] can demonstrate that the accommodation would impose an undue hardship.” The proposed rule contains a “non-exhaustive list” of conditions covered by the Act which includes current pregnancy, past pregnancy, potential pregnancy, lactation (breastfeeding and pumping), use of birth control, menstruation, infertility and fertility treatments, endometriosis, miscarriage, stillbirth and “having or choosing not to have an abortion.” The proposed rule also states that the Act covers postpartum anxiety and depression.

The EEOC began accepting charges claiming violations of the Act on June 27, 2023.

Judges Are Sometimes . . . Unpredictable

You may have heard about a recent case where a Southwest Airlines flight attendant sued the airline (and won) after she was terminated for sending anti-abortion messages to the president of her union. Well, the case just took an unexpected turn.

The judge in the case had ordered that Southwest airlines inform its flight attendants that Southwest "may not discriminate against Southwest flight attendants for their religious practices and beliefs." Southwest instead told employees that it "does not discriminate" against employees based on their religious beliefs. In an order issued this week, the judge correctly noted that Southwest’s notice did not comply with the court’s previous order, but then took an extraordinary step in sanctioning Southwest’s lawyers. As a sanction, the judge ordered that Southwest’s lawyers attend “religious-liberty training” from an organization that has lobbied to curtail rights of LGBTQ+ individuals and was instrumental in the Supreme Court’s Dobb’s decision which overturned Roe v. Wade.

The irony was apparently lost on the judge that he was ordering the lawyers to undergo religious “training” that may be contrary to their own religious beliefs, in a case involving religious liberty. The order will likely be appealed, but the case highlights the fact that litigation can take unpredictable turns. Settling cases where you can control the outcome, as distasteful as it may be sometimes, is often better than taking on the unpredictable risks of litigation.