Region 32-Oakland Secures Settlement Requiring Lucid to Rescind Unlawful Severance Agreement Language

On March 5, 2024, Region 32-Oakland Regional Director Valerie Hardy-Mahoney approved an agreement settling a case against Lucid Group, Inc. (Employer), an electric vehicle manufacturer, based on an unfair labor practice charge filed by its former employees who had been laid off under a May 2023 reduction in force.

The unfair labor practice charge filed in August 2023 alleged that the Employer’s severance agreement contained unlawful provisions that would prevent or discourage employees from exercising their right to engage in protected concerted activity under the National Labor Relations Act.

In the settlement agreement, the Employer agreed to revise its severance agreement to remove an overbroad confidentiality provision, to not seek enforcement of the provision in the severance agreements entered into by the charging parties, and to post a notice of employee rights at its Newark, CA facility and email it to all current employees and those who were employed by the Employer at the Newark Facility and who were part of the reduction in force.

“As General Counsel Abruzzo has explained, unlawful severance agreement provisions like these interfere with employees’ exercising their rights under Section 7 of the National Labor Relations Act,” said Region 32 Regional Director Valerie Hardy-Mahoney. “I am proud of our staff for their efforts in protecting employee rights and achieving this settlement.”

In February 2023, the NLRB issued a decision in McLaren Macomb returning to longstanding precedent holding that employers may not offer employees severance agreements that require employees to broadly waive their rights under the National Labor Relations Act. The decision involved severance agreements offered to furloughed employees that prohibited them from making statements that could disparage the employer and from disclosing the terms of the agreement itself.