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Is post-employment confidentiality still enforceable?
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Is post-employment confidentiality still enforceable?

On Behalf of | Mar 30, 2023 | Business & Commercial Law

If you have recently done a layoff or done one in the past, you may have noticed that your former employees have began posting confidential information recently. And, you may have begun contacting your attorneys about your options, especially as your former employees likely signed severance agreements with confidentiality clauses. If so, you were likely informed that confidentiality clauses are, for now, not enforceable.

What happened?

You likely included your broadly written confidentiality clause in your St. Petersburg, Florida, business’s severance agreement at the behest of your attorney or your own legal research. Prior members of the National Labor Relations Board found that Sections 7 and 8(a)(1) of the National Labor Relations Act allowed for such clauses. However, in February, the Board switched directions under this new administration and found that broadly written confidentiality clauses in severance agreements violate employee rights under the NLRA.

What does that mean?

Until the NLRB’s decision is overturned by a federal court, it means that broadly written confidentiality clauses in severance agreements are not enforceable, immediately and moving forward. This is true, even if you have already paid your former employee their severance package, and you cannot get a refund as a result, if your former employee violated the terms of that, now unenforceable, confidentiality clause.

However, depending on what they said, you may have other options. Consult your St. Petersburg, Florida, outside attorney or general counsel to get your specific options.

Litigation will surely increase

The NLRB’s decision will bring appeals and further litigation, but, until there is a contrary opinion, business owners should treat this decision as settled law. Change your St. Petersburg, Florida, severance agreements accordingly.