Potentially unlawful severance agreement proffered by Honeywell/Rethink signing
Site: https://www.nlrb.gov/news-outreach/news-story/board-rules-that-employers-may-not-offer-severance-agreements-requiring
Since at least 2023, at least one severance agreement from Honeywell has shown that it may include language that, according to some interpretations, could be seen as attempting to discourage or limit the exercise of rights protected under the National Labor Relations Act (NLRA). Specifically, it has been alleged that certain provisions may be overly broad in scope and could be perceived as discouraging employees from engaging in activities protected by federal labor law, including discussing workplace conditions or participating in collective action.
At least one severance agreement offered during this period allegedly included provisions that some believe may have the effect of preemptively limiting an individual’s ability to speak openly about their employment experience in exchange for severance compensation. This language could have a silencing effect, raising questions about its compatibility with long-standing labor protections. While it is widely understood that individuals cannot be compelled to waive their NLRA rights in a broad or coercive manner, whether any specific agreement crosses that line would be a matter for legal interpretation.
In one such agreement, there also appeared to be financial penalty clauses that could expose an individual to substantial economic consequences in the event of an alleged breach. These provisions reportedly included the following potential outcomes:
1 Forfeiture of any future benefits provided under the agreement
2 Repayment of severance previously received, upon demand
3 Responsibility for Honeywell’s legal fees and related enforcement costs
These measures may be unusually stringent for a single employee or ex-employee as a single individual.
The confidentiality and non-disparagement sections of the agreement were also a source of concern. The confidentiality language restricted disclosure of the agreement’s terms to undefined “third parties,” a term that can be ambiguous and insufficiently specific. Additionally, the agreement reportedly required individuals to ensure that others they may have disclosed the terms to also maintain confidentiality—while simultaneously attempting to bar the agreement from being used as evidence against the company in legal or regulatory settings. This may discourage employees from discussing compensation or workplace conditions, which can raise questions about enforceability and intent.
As for the non-disparagement clause, the language—particularly the phrase “at no time on or after the date hereof…”—can be seen as overly broad and indefinite in duration. There are concerns that such language could have a long-term silencing effect, potentially deterring individuals from engaging in protected activity or from offering honest commentary about their work experience in settings such as job interviews or professional networking conversations. Moreover, the provision reportedly extends its protections to a wide array of entities affiliated with Honeywell, including corporate affiliates and successors, raising additional questions about scope and proportionality.
While Honeywell’s severance agreements may vary in content, certain provisions in at least one contain language that could interfere with employees’ rights or impose disproportionate burdens. Individuals considering whether to sign such agreements are strongly encouraged to consult with legal counsel to fully understand the implications of the terms presented.
Look out for language such as the following:
Non-Disparagement
At no time on or after the date hereof will you make any statement, publicly or privately (other than
to your spouse and legal advisors), which would be disparaging (as defined below) to the Honeywell
Group, businesses, management, products, customers, strategies, prospects, image, tradecraft,
practices, office environment, culture, condition, or reputation or that of directors, employees,
officers or members; provided, however, that nothing contained in any provision of this Agreement and
Release shall preclude you from making any statement in good faith which is required by any
applicable law or regulation or the order of a court or other governmental body or initiating or
cooperating with any official government investigation.
Confidentiality
You agree not to disclose or cause any other person to disclose to third parties, including employees
of the Company, the terms of this Agreement and Release; provided, however, that you have the
right to disclose the terms of this Agreement and Release to your spouse, your financial/tax advisor,
your attorney, and in response to a governmental inquiry, including a governmental tax audit or a
judicial subpoena, or as otherwise required by law. If you disclose the terms of this Agreement and
Release to any of the foregoing, you agree to instruct such persons to maintain the confidentiality
thereof. You understand that your breach of this confidentiality provision shall excuse the
Company from performing further under this Agreement and Release. You agree that neither this
Agreement and Release nor any version of this Agreement and Release shall be admissible in any
forum as evidence against the Company or you except in a proceeding to challenge or enforce this
Agreement and Release. This Agreement and Release does not constitute an admission of
wrongdoing by either party.
If you materially breach of any of the terms of this Agreement and Release (including any intellectual
property or noncompetition agreements to which you may be subject, and which are hereby
incorporated by reference), you (a) shall forfeit all right to future benefits under this Agreement and
Release; (b) must repay all benefits previously received pursuant to this Agreement and Release upon
the Company’s demand; and (c) must pay reasonable attorneys’ fees and all other costs incurred as a
result of your breach. However, ten percent (10%) of the cash severance benefits received will be
exempt from this repayment provision and will constitute consideration for the Release of Claims
set forth below. Provided, however, this subparagraph shall not be applicable to challenges to the
validity of this Agreement and Release under the Age Discrimination in Employment Act or Older
Workers Benefit Protection Act, nor will the Company seek any damages of any sort against you for having made such a challenge.