On April 7, 2026, the National Labor Relations Board (NLRB) issued a decision in Prime Communications, reinforcing the Board’s post‑McLaren Macomb approach to severance agreements and signaling continued scrutiny of allegedly overly broad confidentiality and non‑disparagement clauses.
The case arose from severance agreements offered by Prime Communications, a telecom retailer, to several departing employees. The agreements contained expansive non‑disparagement provisions—expressly intended to be “as broad as possible”—as well as confidentiality clauses barring employees from discussing the agreement or contacting other employees. The General Counsel alleged that these provisions violated the National Labor Relations Act by unlawfully chilling employees’ Section 7 rights.
An administrative law judge (ALJ) agreed, finding the provisions facially coercive even absent evidence that the company attempted to enforce them. Prime Communications appealed that decision to the Board.
For its part, the Board affirmed the ALJ’s findings and ordered Prime Communications to rescind the allegedly unlawful provisions and notify affected former employees. Applying its 2023 decision in McLaren Macomb, the Board emphasized that the legality of a severance agreement turns on whether a reasonable employee would read the language as restricting protected activity—not on employer intent or actual deterrence.
Prime Communications does not create new law; rather, it solidifies McLaren Macomb as governing precedent. The decision confirms that the Board will apply McLaren retroactively to agreements predating that ruling when the language itself reasonably tends to interfere with Section 7 rights.
Notably, Board members acknowledged that they may be open to reconsidering McLaren in a future case but concluded that—absent a three‑member majority—existing precedent controlled. That prospect may therefore hinge on the successful confirmation of a third Republican. On April 13, the White House took the first step in making that possible by nominating a candidate to fill out that majority.
In the meantime for employers, the message remains clear: severance agreements must be narrowly tailored. Broad prohibitions on criticism, discussions with coworkers, or cooperation with government agencies are likely unlawful. Employers should review existing templates and consider limiting confidentiality clauses to trade secrets or settlement amounts and non‑disparagement clauses to knowingly false statements. Until the Board revisits McLaren, Prime Communications confirms that caution remains the safer course.
