Silence is Not for Sale

Recently, the National Labor Relations Board released a ruling which stated that severance packages which require employees to waive their rights under the National Labor Relations Act are a violation of an employee’s rights under the act. The reason behind the NLRB’s new ruling is because "the employer’s offer is itself an attempt to deter employees from exercising their statutory rights, at a time when employees may feel they must give up their rights in order to get the benefits provided in the agreement.”

• Employers cannot stop an employee from disclosing the terms of their severance packages.

• Employers cannot stop an employee from speaking about the company or its managers via a severance package (liable and slander laws are still applicable as they would be without a severance package).

While there are many employee advocates who are lauding this recent ruling, it’s important to remember that the motivation for providing severance is normally comprised of two parts:

1) Feeling bad about laying someone off and therefore providing money to soften the unemployment blow.
2) Protecting the company's and leadership's image and brand positioning within the market.

Businesses constantly do risk analysis and cost trade-offs. They don't have to provide severance packages. But, when they do, one of the considerations is "what's the minimum amount of money I can pay this person so that they will immediately sign away any right to sue or disparage the company."

Removing this consideration could be fantastic. But, it could also lead to significantly reduced severance packages or no severance packages at all in the long run.

As important as what the future holds for future severance packages is what does the future hold for all of those employees who had to keep quiet about their companies, their severance packages, and their managers? Will the stories that these heretofore quiet employees share shock the public or will they be mundane? For those companies currently laying off employees, will they pull back unsigned severance packages so that their amounts can be reduced?

Unfortunately, the path to hell is often paved with good intentions and it will be some time before we learn if laid off employees are walking a path toward heaven or descending down into the depths of hell.