It’s growing harder for employers to buy peace and quiet

The pressure for employers to have a good reputation continues to mount – in good times and in bad. It’s no longer enough for employers to keep their employees happy while they work there; they must also keep them happy on their way out too. There are countless examples of fired or laid-off employees taking to social media to spill the tea.

In response, employers have relied heavily on confidentiality and non-disparagement clauses as part of a severance package in order to keep their former employee’s quiet. Essentially, they provide money on the way out the door, and require silence in exchange. There’s nothing wrong with this legal strategy. In fact, it’s quite common. It also usually allows the employer to offer more in severance than they otherwise would.

Slowly but surely, however, those common practices are coming under scrutiny. Employers need to adjust their employee/labour relations strategies and reputation practices accordingly.

Most recently, the National Labor Relations Board in the US ruled that employers can no longer use broadly written confidentiality and non-disparagement clauses as part of a severance agreement to keep former employees quiet. For those unfamiliar with the American National Labor Relations Board, it’s the body that enforces the federal legislation that applies to most private sector employers in the US. It’s a big change and will cause a lot of American HR folks and employment lawyers to scratch their head.

It's entirely possible such changes could come to Canada. There is a growing “Can’t Buy My Silence” movement. PEI already banned confidentiality clauses in cases of misconduct. There is a private member’s bill in Manitoba pushing for this change too. Ontario recently banned the use of non-compete clauses in employment contracts. These precedents may be the thin edge of the wedge.

Aside from the legal wrangling, this all means more laundry will be aired by former employees. This will put pressure of companies to assess their reputational risk along side their legal risk when considering lay-offs and terminations to ensure that laundry is clean.

As a lawyer and communications expert with significant experience in labour/employee relations and reputation management, I can help navigate these situations and, more importantly, prevent things from going awry in the first place. Get in touch any time.