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🗞️ Sign Here, Lose Your Voice: NLRB Judge Rules Detrex's Severance Agreement Unlawfully Restricted Workers' Rights

An NLRB administrative law judge ruled that Detrex Corp. violated federal labor law by presenting a terminated union employee with a severance agreement containing overbroad confidentiality and non-disparagement clauses that infringed on workers' Section 7 rights.

On May 6, 2026, Administrative Law Judge Susannah Merritt issued a decision finding that Detrex Corporation, a chemical manufacturer in Ashtabula, Ohio, committed an unfair labor practice when it presented a terminated employee with a severance agreement conditioning additional pay on the relinquishment of rights that federal labor law protects. The agreement offered two weeks of supplemental pay totaling $2,742.40 in exchange for the employee's signature.

The case centered on Timothy Batanian, a six-year employee and member of the United Steelworkers bargaining unit, who was called into a meeting on May 3, 2024, and handed two documents: a termination letter and a "Release of All Claims" form. He was told he had to sign both to receive the severance payment. He signed neither.

The agreement's confidentiality clause prohibited Batanian from ever divulging "confidential and proprietary information" he had acquired during his employment — a definition broad enough, the judge found, that an ordinary worker could reasonably conclude it covered wages, working conditions, and other subjects employees have a federal right to discuss. The non-disparagement clause went further, barring him from making any disparaging or defamatory remarks — oral, written, or posted to social media — about the company, its parent entities, and their officers, directors, employees, shareholders, customers, and clients, with no time limit attached.

Both provisions, Judge Merritt concluded, ran afoul of the National Labor Relations Act.

The Legal Framework

The governing precedent is McLaren Macomb, 372 NLRB No. 58 (2023), in which the NLRB held that employers violate Section 8(a)(1) of the Act when they merely proffer a severance agreement conditioning benefits on the forfeiture of employees' Section 7 rights — rights that include the ability to organize, bargain collectively, discuss workplace conditions with coworkers, and communicate with unions, the media, and government agencies.

McLaren Macomb reversed the more permissive 2020 standards set under Baylor University Medical Center and IGT d/b/a International Game Technology, which had allowed such provisions so long as the surrounding circumstances did not independently reflect unlawful intent. Under McLaren Macomb, the text of the agreement itself is the primary inquiry. If the language has a reasonable tendency to coerce employees, the violation is established — regardless of whether anyone ever signed the agreement, and regardless of the employer's intent.

Why Detrex's Defenses Did Not Hold

Detrex mounted three arguments, each of which the judge rejected.

First, Detrex urged the judge to overrule McLaren Macomb, pointing to Memorandum GC 25-05, issued by Acting General Counsel William Cowen in February 2025, which rescinded prior General Counsel guidance interpreting McLaren Macomb. The judge was unmoved. General Counsel memoranda do not constitute binding Board law. McLaren Macomb remains intact as a Board decision, and administrative law judges are bound to follow it until the Board itself overrules it.

Second, Detrex argued that disclaimer language in both provisions — stating that nothing in the agreement would "prohibit Employee from engaging in activity protected under Section 7 of the National Labor Relations Act" — cured any overbreadth. The judge disagreed, reasoning that rank-and-file workers are not lawyers. When the employee at the center of the case was asked by defense counsel whether he understood what "Section 7 rights" were, he said he did not. Citing Stericycle, Inc., 372 NLRB No. 113 (2023), the judge applied the Board's standard that workplace policies must be evaluated from the perspective of a non-lawyer employee — not a practitioner equipped to parse statutory cross-references.

Third, Detrex contended that revising the severance agreement would constitute an unlawful unilateral change to the parties' collective bargaining agreement under Section 8(a)(5) of the Act. The judge found the argument unpersuasive: the parties had never bargained over severance terms, the collective bargaining agreement contained no reference to them, and it was the Union itself that had filed the unfair labor practice charge seeking the language's removal.

The judge also addressed a savings clause on the first page of the agreement that preserved the employee's right to file charges with the EEOC or the NLRB. That language fell short on two grounds. It said nothing about the employee's right to discuss working conditions with coworkers, unions, or the public — leaving the broader universe of Section 7 rights unaddressed. More critically, the same clause explicitly waived the employee's right to any monetary recovery arising from such agency proceedings, a restriction the Board has held independently unlawful because it removes a significant incentive for filing charges in the first place.

Key Points

Detrex Corp. presented a terminated union employee with a severance agreement offering $2,742.40 in additional pay in exchange for signing provisions the judge found to be overbroad under federal labor law.
Under McLaren Macomb (2023), merely offering such an agreement to an employee constitutes an unfair labor practice — even if the employee never signs it.
The non-disparagement clause applied to all written and oral statements, covered an expansive group of corporate affiliates, customers, and clients, and carried no time limit.
The confidentiality clause was broadly defined, leaving employees to reasonably conclude it barred them from discussing wages or working conditions with coworkers or unions.
Disclaimer language referencing "Section 7 rights" was insufficient because ordinary employees cannot be expected to know what that term encompasses.
A savings clause preserving the right to file agency charges was itself found problematic because it waived any monetary remedy from those proceedings.
Acting General Counsel Cowen's rescission of prior General Counsel guidance interpreting McLaren Macomb did not alter the underlying Board decision, which the judge was required to follow.
Detrex was ordered to rescind the unlawful provisions, notify all current and former employees who worked there at any time since May 2, 2024, in writing, and post a remedial notice for 60 consecutive days.

Context and Significance

The decision arrives at a moment of shifting enforcement priorities at the NLRB. In February 2025, Acting General Counsel Cowen issued Memorandum GC 25-05, which rescinded a number of prior General Counsel memoranda, including the 2023 guidance that had directed regional offices on how to apply McLaren Macomb. Even so, the Board's adjudicative decisions remain controlling authority until the Board formally overrules them. Judge Merritt cited a recent Board decision, Prime Communications, LP, 374 NLRB No. 88 (April 7, 2026), confirming that McLaren Macomb continues to govern.

For employers, the case is a reminder that boilerplate severance language predating 2023 may carry legal exposure that a general Section 7 carve-out phrase alone will not cure. For employees and unions, it illustrates that the protections established in McLaren Macomb — including the right to speak about workplace conditions, communicate with fellow workers, and pursue remedies before federal agencies without waiving monetary recovery — remain enforceable under current Board law.

Sources

Primary Source Author: Administrative Law Judge Susannah Merritt

Primary Source: Detrex Corp., a Subsidiary of the Elco Corp., and a Wholly Owned Subsidiary of Italmatch USA Corp., JD-29-26, Case 08-CA-343335 (NLRB Div. of Judges, May 6, 2026)

Primary Source Link: https://www.nlrb.gov/case/08-CA-343335