The National Labor Relations Board (“NLRB” or the “Board”) has once again weighed in on employer use of confidentiality and non-disparagement language, this time in the settlement arena. Recently, the NLRB withheld its approval of a global settlement of Fair Labor Standards Act (“FLSA”) claims and Board charges, stating its objection to the negotiated non-disparagement and confidentiality provisions in the parties’ settlement agreement.
The employer, Liberato Restaurant, agreed to a $1 million settlement of an FLSA class action lawsuit brought by current and former employees who alleged non-payment of tips and overtime wages. As part of the settlement, plaintiffs agreed to dismiss charges filed with the NLRB. The settlement agreement included promises by both parties to not disparage the other and not to disclose the terms of the agreement to the public. Such provisions are routinely included in settlement agreements, and have been accepted in settlements involving wage and hour claims.