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🗞️ The Clause That Cost Honeywell

It was ruled that Honeywell International violated the National Labor Relations Act by maintaining overly broad confidentiality provisions in its standard employment agreement and by offering terminated employees a severance package.

onthelaborfront

10 Mar 2026 — 5 min read

The case began when Stephen Ferguson, an advanced project manager at Honeywell's Mason, Ohio facility, was laid off in July 2023 as part of a reduction in force. During his termination meeting, Honeywell's human resources staff told him a Severance Agreement would be sent to him. A few days later, Ferguson received the agreement by email. It offered four weeks of pay and outplacement services in exchange for, among other things, waiving the right to file claims related to his termination. Ferguson chose not to sign it, later stating he believed certain provisions conflicted with existing NLRB precedent. He subsequently filed charges against Honeywell that included a claim of race discrimination related to his termination.

The NLRB's Regional Director issued a formal complaint in July 2025, alleging two distinct categories of violations. The first concerned Honeywell's Employment Agreement — a document required as a condition of hire for non-California employees at or above a certain classification level. The agreement's definition of "Confidential Information" was sweeping, covering not only recognized categories of protectable business information such as trade secrets, patents, inventions, and customer lists, but also broader categories including employee identities and competencies, general financial and operating data, and undifferentiated "knowledge, data, information." Administrative Law Judge Christal J. Key applied the NLRB's 2023 Stericycle standard, under which a facially neutral work rule is presumptively unlawful if a reasonable employee — one who is economically dependent on the employer and considering protected activity — could read the rule as restricting that activity. The judge found the broad categories of restricted information would reasonably lead an employee to conclude that discussing wages, identifying coworkers to a labor organization, or sharing workplace-related information with third parties was prohibited. Honeywell presented testimony from its senior HR director that the restrictions existed to protect competitive advantages, guard proprietary product information, and prevent competitors from recruiting its workforce. The judge acknowledged these as legitimate business interests but found the agreement covered substantially more ground than those interests required, and that Honeywell had not demonstrated it could not protect those interests through a more narrowly written rule.

The second category of violations concerned the Severance Agreement itself. Three specific provisions were examined. The confidentiality clause barred employees from discussing the agreement's terms with other employees or third parties. The judge found this would discourage groups of employees — for example, those laid off simultaneously — from comparing their respective agreements or collectively seeking modifications, both of which constitute activity protected under federal labor law. The non-disparagement clause prohibited any public or private statement that could create a negative impression of Honeywell, its management, products, culture, or reputation, with no expiration date and covering a wide range of individuals and entities. The cooperation and nondisclosure clause required employees to notify Honeywell before sharing information related to any pending or potential litigation with any third party except a government agency, and to allow a Honeywell representative to be present during such communications. The judge found this provision would restrict employees from freely cooperating with coworkers, attorneys, or other parties investigating employment-related legal matters prior to any formal government filing, and that the financial penalties for breach — including repayment of severance and coverage of Honeywell's attorney fees — added significant coercive weight.

Honeywell argued that a "savings clause" on page four of the Severance Agreement, printed in bold, cured any potential violations. The clause stated that nothing in the agreement prevented employees from filing charges with government agencies or engaging in activity protected by the National Labor Relations Act. The judge found this insufficient. Citing the Board's 2023 McLaren Macomb decision, the judge reasoned that rank-and-file employees are not expected to resolve legal contradictions between broadly worded restrictions on one page and a legal disclaimer on another — particularly when those restrictions expressly prohibit the very employee-to-employee discussions that the disclaimer purports to protect. The Employment Agreement contained no savings clause whatsoever, and its restrictions ran during the entire period of employment and for two years after separation, regardless of whether an employee ever signed a severance agreement.

The judge declined to award backpay to Ferguson individually, finding that even a fully compliant severance agreement would not have been signed by him. Ferguson was simultaneously pursuing a race discrimination claim that required him to preserve his right to sue — a right the severance agreement would have required him to waive. Awarding him the severance pay under those circumstances, the judge found, would provide a windfall he would not otherwise have received.

Honeywell was ordered to rescind the unlawful provisions in both agreements, notify affected current and former employees that those provisions are void and will not be enforced, and post NLRB-mandated notices at all relevant U.S. facilities for 60 consecutive days.

Key Points

Honeywell's Employment Agreement, required as a condition of hire, defined "Confidential Information" broadly enough to include employee identities, general financial data, and undifferentiated "knowledge" — categories the judge found would reasonably lead employees to believe discussions of wages and workplace conditions were prohibited under the agreement.
The 2023 Stericycle standard establishes that a neutral-sounding work rule is presumptively unlawful if a reasonable, economically dependent employee could read it as discouraging protected activity, even if another interpretation is also plausible.
Three provisions of Honeywell's Severance Agreement were found unlawful: a confidentiality clause restricting discussion of the agreement's terms with other employees; a non-disparagement clause with no time limit and broad scope; and a cooperation and nondisclosure clause requiring pre-approval before speaking with most third parties about potential litigation.
A savings clause in the Severance Agreement, printed in bold, was found insufficient to cure the violations because other provisions in the same document directly contradicted it — and employees are not expected to parse those legal tensions without legal training.
The Employment Agreement contained no savings clause at all, and its restrictions applied for two years post-employment regardless of whether a severance agreement was ever signed.
Ferguson managed a project — a shoe sorter — that had generated approximately $101 million in revenue at the time of his termination, with lifetime projections of around $300 million; the judge considered this context when evaluating the legitimacy of Honeywell's interest in protecting proprietary information.
The judge did not award backpay to Ferguson, finding he would not have signed any version of the agreement because doing so would have required waiving his separate race discrimination claim.
Honeywell must rescind the unlawful provisions, notify employees who signed severance agreements since July 14, 2023, and notify employees currently or recently bound by the Employment Agreement's confidentiality terms that those provisions are null and void.