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🗞️ Hush Money Has Limits: The NLRB Case Against Severance Silence

A North Carolina radiology firm's separation agreement becomes the latest test of a landmark labor board ruling that reshaped how employers may silence departing workers.

onthelaborfront

03 Mar 2026 — 3 min read

On March 3, 2026, Administrative Law Judge Robert A. Giannasi issued a decision in Valley Radiology, P.A. (Case 10-CA-324512), finding that the Fayetteville, North Carolina radiology practice committed an unfair labor practice under Section 8(a)(1) of the National Labor Relations Act (NLRA). The case centered on a Separation and Release Agreement offered to Dr. Leena Mammen, a physician who left the practice in July 2023 after approximately five and a half months of employment — just short of the six-month term specified in her employment agreement.

The agreement was offered as an alternative to repaying a $25,000 balance on a signing bonus loan. In exchange for loan forgiveness, the agreement required Dr. Mammen to accept, among other terms, a broad non-disparagement clause prohibiting her from saying or doing anything to "disparage," "injure," or "harm" the company or its affiliates, and a confidentiality clause barring her from disclosing the existence or contents of the agreement to nearly anyone. Dr. Mammen declined to sign.

The legal framework for the case was set by the NLRB's 2023 decision in McLaren Macomb, which reversed two Trump-era Board decisions — Baylor University Medical Center (2020) and IGT d/b/a International Game Technology (2020) — that had permitted confidentiality and non-disparagement provisions in severance agreements absent additional coercive circumstances. McLaren Macomb returned to older precedent by holding that overbroad clauses have a "reasonable tendency to interfere with, restrain, or coerce" employees' rights under Section 7 of the NLRA, and that merely offering such an agreement — even if never signed — is itself an unlawful act.

Judge Giannasi found that both clauses in Valley Radiology's agreement mirrored the language found unlawful in McLaren Macomb. The non-disparagement provision was broad enough to cover employee statements about labor disputes, working conditions, and NLRB filings. The confidentiality clause could have effectively prevented Dr. Mammen from filing the very unfair labor practice charge at the heart of the case. Valley Radiology conceded these points but argued for McLaren Macomb's reversal — a position the judge noted he could not accommodate, as the ruling remains binding Board law.

On remedy, the judge sided with Valley Radiology in rejecting the General Counsel's broader proposed relief. While the General Counsel sought to require Valley Radiology to re-offer the severance agreement including loan forgiveness, the judge found this punitive and beyond the scope of the violation. The employer was instead ordered to rescind or revise the unlawful clauses, offer a lawful severance agreement to Dr. Mammen, and post required notices.

The case arrives at a moment of significant uncertainty for McLaren Macomb itself. The Trump Administration's acting NLRB General Counsel rescinded the Biden-era guidance memo (GC 23-05) that had expanded the ruling's scope and application in early 2025. While the McLaren Macomb decision itself remains operative Board law — enforceable until the Board formally overrules it — the NLRB currently lacks a full complement of members, limiting its ability to revisit precedent. Employers operating under severance agreement policies shaped by McLaren Macomb should continue to monitor Board composition and any future decisions that may narrow or reverse the ruling.

Key Points

Valley Radiology offered a departing doctor a separation agreement that would forgive a $25,000 loan in exchange for signing broad non-disparagement and confidentiality clauses.
The doctor declined to sign; the NLRB's General Counsel filed a complaint alleging that offering the agreement was itself an unfair labor practice.
Under McLaren Macomb (2023), even offering — not just enforcing — a severance agreement with overbroad clauses violates Section 8(a)(1) of the NLRA.
Valley Radiology conceded the legal violation but argued McLaren Macomb should be overturned; the ALJ applied it as binding law.
The remedy was limited to rescinding the unlawful clauses and offering a revised agreement — the judge rejected requiring loan forgiveness as punitive overreach.
The Trump Administration rescinded the Biden-era NLRB memo (GC 23-05) that had expanded McLaren Macomb's scope, though the underlying ruling remains in effect.
Non-supervisory, private-sector employees retain Section 7 protections regardless of union status; these cases apply to union and non-union workers alike.
Employers should treat narrowly tailored clauses (e.g., protecting genuine trade secrets, or keeping financial terms private) as potentially permissible, while broad "gag" language remains at risk.