Offit Kurman Law Blog
Labor and Employment
Could Employers Soon Have More Flexibility in Severance Agreements?
In 2023, the National Labor Relations Board issued its landmark decision in McLaren Macomb, fundamentally changing how employers draft severance agreements. The Board held that employers violate the National Labor Relations Act (NLRA) when they offer severance agreements containing overly broad confidentiality and non-disparagement provisions that could interfere with employees' rights under Section 7 of the Act. The Board further concluded that merely offering such an agreement may constitute an unfair labor practice, even if the employee never signs it. What Did McLaren Macomb Hold? The severance agreements at issue prohibited employees from disclosing the agreement's terms and from making statements that could disparage the employer. The Board found these provisions unlawful because employees could reasonably interpret them as restricting their ability to discuss workplace conditions, communicate with coworkers, cooperate with unions, or participate in NLRB proceedings. Why Nonunion Employers Should Care Although the case arose in a unionized workplace, the NLRA protects most private-sector employees, regardless of union status. As a result, McLaren Macomb affected employers with both unionized and nonunion workforces. Employers across industries revisited severance agreements and added carve-outs, preserving employees' rights to engage in protected concerted activity and communicate with government agencies. The Decision's Reach Extended Beyond Confidentiality and Non-Disparagement Clauses Shortly after the decision, then-General Counsel Jennifer Abruzzo issued guidance explaining that lawful severance agreements remain permissible but warning that McLaren Macomb may also impact other common provisions. The memorandum identified noncompete clauses, no-solicitation provisions, no-poach agreements, overly broad releases of claims, broad covenants not to sue, and certain cooperation requirements as provisions that could potentially interfere with employees' Section 7 rights. The memorandum also emphasized that simple disclaimer language or "savings clauses" would not automatically cure otherwise overbroad restrictions. A Potential Shift on the Horizon The future of McLaren Macomb may be uncertain. In a recent memorandum outlining agency priorities, NLRB General Counsel Crystal Carey identified McLaren Macomb as a decision her office is seeking to have reconsidered and overruled. While that memorandum does not change existing law, it signals a significant policy shift within the agency and raises the possibility that a future Board could restore greater flexibility for employers when drafting severance agreements. The Bottom Line For now, McLaren Macomb remains binding law. Employers should continue to ensure that severance agreements do not contain provisions that could be interpreted as restricting employees' NLRA rights. However, with the current General Counsel actively seeking reversal of the decision, employers should closely monitor developments that could once again reshape the rules governing severance agreements.
October 16, 2026
Landlord Representation
Avoiding FLSA Pitfalls When Offering Onsite Housing and Rent Discounts
Onsite housing and rent discounts are common benefits in the property management industry, but federal wage-and-hour litigation makes clear that these arrangements can create significant Fair Labor Standards Act (FLSA) exposure if they are not carefully structured. The central question courts ask is not how the benefit is labeled, but whether onsite living primarily benefits the employer and whether it results in unpaid or underpaid work. When housing benefits blur into compensation or operational control, employers face heightened risk of overtime liability, off‑the‑clock claims, and retaliation allegations. Keep Housing Truly Voluntary Housing benefits pose the least FLSA risk when employees are free to live onsite by choice rather than necessity. Requiring onsite residence as a condition of hire or continued employment strongly suggests that the arrangement exists for the employer’s benefit. Employers should ensure that employment offers, policy documents, and actual practices make clear that living onsite is optional and that declining housing has no effect on wages, scheduling, or job security. Separate Housing Benefits from Compensation Rent discounts must remain clearly distinct from wages. When discounts vary by job title, seniority, or responsibility, courts are more likely to view the housing as compensation rather than a fringe benefit. Uniform discounts—or discounts that are demonstrably unrelated to performance or availability—are easier to defend. Employers should avoid structuring housing benefits in ways that resemble pay incentives or substitutes for overtime compensation. Avoid Creating Implicit On‑Call Obligations Employees who live onsite are often perceived—by management or by tenants—as naturally available after hours. Even absent a formal on-call policy, this expectation can give rise to compensable work time. Employers should clearly define work hours, limit after-hours requests, and avoid relying on employees’ proximity as a substitute for staffing. Where on-call work is required, it must be clearly documented and compensated in accordance with the FLSA. Use Arms-Length Leasing Practices Treating employee residents the same as non-employee tenants reinforces the non-compensatory nature of housing benefits. Requiring standard rental applications, background checks, and lease agreements supports an arms-length relationship and reduces the argument that housing is a condition or incident of employment. Special treatment, guaranteed units, or waived leasing requirements undermine that distinction. Pay for All Time Worked—Including After Hours After-hours responses to maintenance calls, tenant complaints, or emergencies frequently constitute compensable work time. Employers should implement reliable timekeeping procedures that allow employees to record this work and should train supervisors to avoid discouraging accurate reporting. Failure to capture and pay for after-hours work remains one of the most frequent sources of FLSA liability in the property management context. Evaluate Whether Rent Discounts Affect the Regular Rate When onsite living primarily benefits the employer—by ensuring immediate coverage, enhanced security, or continuous availability—the value of a rent discount may be required to be included in the regular rate of pay for overtime calculations. Employers should evaluate housing arrangements holistically and seek legal guidance before excluding rent discounts from overtime calculations, particularly where onsite residence is expected or strongly encouraged. Bottom Line Onsite housing can be a lawful and effective benefit, but only when it functions as a voluntary perk rather than an operational necessity. When housing is mandatory, compensation-linked, or tied to unpaid availability, FLSA risks increase substantially. Careful program design, clear policies, and consistent compensation practices are essential to minimizing wage-and-hour exposure.
April 20, 2026
Landlord Representation
Upcoming Deadlines/Changes to DC Employment Law
The District of Columbia takes a very active approach to regulating the employer-employee relationship, which frequently results in new obligations being imposed on employers. These obligations can oftentimes be difficult for small and mid-market businesses to monitor. Despite this difficulty, the DC Government has become increasingly more aggressive in bringing enforcement actions against employers. Therefore, it’s essential to be proactive in identifying new obligations and ensuring compliance, thereby minimizing the likelihood of getting caught flat-footed and having to pay fines. Importantly, a few of these obligations and deadlines are quickly approaching. Wage Transparency Act[1] Beginning on June 30, 2024, employers with one or more employees in the District of Columbia will be required to disclose a greater amount of information to prospective job applicants. Specifically, employers will be required to list the anticipated compensation in all job listings by providing a good faith approximation of minimum and maximum salary or hourly pay. The Wage Transparency Act also mandates that employers disclose the existence of healthcare benefits that the prospective employee may receive prior to the initial interview. Moreover, the act prohibits employers from seeking a job applicant’s wage history and screening prospective employees based upon that information. Minimum Wage Increase[2] Earlier this year, the District of Columbia Department of Employee Services announced a minimum wage increase. On July 1, 2024, the D.C. minimum wage will experience a modest bump, jumping to $17.50. Additionally, the base minimum wage for tipped employees will increase to $10.00. These increases will affect all employers within the District of Columbia, regardless of size. Impending Deadline for Report to DDOT Displaying Compliance with Parking Cashout Law In 2020, the District of Columbia enacted the Parking Cash Out Law, which imposes notable obligations on employers with twenty or more employees that offer free or subsidized parking. Under the parking cashout law,[3] employers are required to offer either (a) a clean air transportation benefit in an amount equal to or greater than the parking benefit offered to employees, (b) a transportation demand management plan to reduce employee commuter trips made by car, or (c) pay a clean air compliance fee of $100 per month for each benefit who is offered a parking benefit. To monitor compliance, employers are required to submit a report to the District’s Department of Transportation (“DDOT”) every two years that shows the employer’s compliance. Additionally, employers that are exempt from this statute are also required to submit a report outlining the basis for their exemption. The first report was due to the DDOT by January 15, 2023, which means the deadline for the next report will be in roughly six months. Disclaimer: The contents of this blog should not be considered legal advice [1] Chapter 14A. Wage Transparency. | D.C. Law Library (dccouncil.gov) [2] GOVERNMENT OF THE DISTRICT OF COhttps://does.dc.gov/sites/default/files/dc/sites/does/publication/attachments/DOES_OWH%202024%20Minimum%20Wage%20Increase%20Notice.pdfLUMBIA (dc.gov) [3] D.C. Law 23-113. Transportation Benefits Equity Amendment Act of 2020. | D.C. Law Library (dccouncil.gov)
June 3, 2024
