As we navigate through 2023, the employment law landscape continues to shift and evolve, more so than many experts had anticipated. The dynamic regulatory framework has been particularly noteworthy, with federal government agencies actively weighing in and reshaping the contours of employment documentation.
Of particular interest to employers should be the close scrutiny severance agreements have come under by key regulators. Early in the year, the National Labor Relations Board issued new opinions on the legal requirements for non-disparagement and confidentiality clauses. This was followed by the Securities and Exchange Commission taking a firm stance on whistleblower provisions within general releases. Both these regulatory interventions have a direct bearing on standard severance agreement templates; most existing templates may now be outdated and potentially non-compliant.
The implications for employers are clear. In an environment where regulatory oversight is pouring in from diverse directions, ensuring compliance is not just a good practice – it’s an imperative. Every organization should consider adopting active regulatory review and compliance practices as a core component of its risk management strategy.
Which brings us to the heart of the matter: the prevalent practice of recycling or reusing employment document templates. While templates can provide convenience and a semblance of document standardization, in today’s rapidly changing legal environment, they can also pose significant risks. Think about it. A template, even if it’s a few months old, could be rendered obsolete by a new piece of legislation or a regulatory directive. It’s prudent then for any organization to check in with their employment counsel before using a form document, recycling a document previously used for another employee, and certainly before deploying an internally drafted document. Legal review is essential.
A common employer misconception is that an agreement used for one employee can simply be repurposed for another worker. This is a dangerous assumption. Beyond the evolving legal landscape, there are numerous factors that may necessitate bespoke modifications to any employment document. Consider the age of the employee in question. Regulations and protections often vary based on federal and state age-based protections. The size of your organization at the time of an employee’s termination can also have a significant impact, with different legal requirements applying to large corporations, but not always to smaller businesses.
Employment documents previously-executed by an employee may also give rise to another layer of complexity. Each document could have clauses or conditions that must be harmonized with any new agreement, lest they create conflicts or ambiguities. And, of course, there’s the jurisdictional element: Employment law is not uniform across states and localities. The state in which an employee primarily operates is generally controlling, but a jurisdiction where the employee is temporarily relocated, for example, could also have specific mandates, protections, or clauses that need to be integrated into any employment agreement or severance package.
In a nutshell, while templates can offer a starting framework, they are far from a plug-and-play solution in the intricate world of employment law, especially in a year as dynamic as 2023. While the evolving landscape might seem daunting, it may also present organizations with an opportunity: to be vigilant; to prioritize compliance; and to ensure that every employment decision is rooted in the most current legal understanding. As the boundaries of employment law continue to expand and shift, the onus is on every organization to adapt, stay informed, and prioritize the individual nuances of every employment relationship. The dangers of reusing employment document templates have never been clearer, and the need for tailored, legally sound employment documents has never been greater.
If you have questions or need any assistance concerning guidance around employment law in your workplace, please contact Doug Taylor at (703) 525-4000 or rdougtaylor@beankinney.com.
This article is for informational purposes only and does not contain or convey legal advice. Consult a lawyer. Any views or opinions expressed herein are those of the authors and are not necessarily the views of any client.