Radiology practice’s severance agreement is unlawful, National Labor Relations Board rules
A North Carolina radiology practice’s severance agreement has been deemed unlawful, according to a decision issued by the National Labor Relations Board on Tuesday.
Leena Mammen, MD, first brought the complaint against Fayetteville-based Valley Radiology in 2023. She had previously worked at the practice starting that year and received a $50,000 signing bonus as part of her employment.
However, Mammen was supposed to repay the funds, if she opted to leave the practice within the first six months. Valley Radiology reportedly offered the alternative of signing a severance agreement, which would forgive the remaining amount. In exchange, she would promise not to publicly disparage the practice and keep confidential any details of said agreement.
It also stipulated that Mammen would waive a series of other employment rights she might have against Valley Radiology. She opted not to reply to the July 25, 2023, letter and did not sign the severance agreement, nor did she pay back the remaining balance. Instead, Mammen filed a charge against her former employer the following month, which she finally won this week.
“Having found that [Valley Radiology] has engaged an unfair labor practice, I shall recommend that it be ordered to cease and desist from its unlawful conduct and take certain affirmative action designed to effectuate the policies of the [National Labor Relations] Act, including the posting of an appropriate notice,” the NLRB said in its March 3 ruling.
Mammen started working at Valley Radiology on Feb. 1, 2023, and was having about $4,1667 of the signing bonus forgiven for each month of work she completed. She officially ended her employment there on July 16, 2023, at which time about $25,000 of the signing bonus needed to be repaid. Valley Radiology reportedly said it would forgive the amount, if the radiologist signed a separation agreement. This included agreeing not to say, write or do anything to disparage or defame the company. Mammen also would agree not to disclose any details about the agreement, including the amounts of money impacted.
In his March 3 decision, Administrative Law Judge Robert A. Giannasi shared an important litmus test: Does the severance agreement “interfere with, restrain or coerce employees who may engage in activities protected by Section 7 of the Labor Act? He noted that agreements that prevent employees from filing charges with the NLRB have been “consistently deemed unlawful.”
“I therefore find that the confidentiality and nondisparagement clauses that are part of the separation agreement are violative of Section 8 of the Act,” the decision states. “Thus, proffering the separation agreement is itself unlawful and violative of Section 8.”
Giannasi is ordering Valley Radiology to cease and desist from using severance agreements that contain unlawful nondisparagement and confidentiality clauses. The practice also must stop interfering with or restraining employees from exercising their rights under labor laws. Valley Radiology also must issue a new severance agreement for the physician to sign within 14 days and post a notice related to this matter at its Fayetteville, North Carolina offices. The judge said he is OK with having the radiologist pay back the amount in question, which was not central to the dispute.
Valley Radiology did not immediately respond to a request for comment late Wednesday. Law360 first reported news of the NLRB decision on March 4. You can find documents related to the decision here.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.