House to cap severance deals at six weeks of pay, prohibit gag clauses

Beth LeBlanc
The Detroit News

Lansing — The Michigan House will no longer enter severance packages that exceed six weeks of pay and will publish an annual list of agreements that exceeded six weeks of pay because of a legal settlement, Republican Speaker Jason Wentworth said Thursday. 

No agreement will include language that would prohibit employees from acknowledging or speaking about their severance agreements, Wentworth added. 

The change in policy comes weeks after The Detroit News discovered in email correspondence that Gov. Gretchen Whitmer's administration entered a non-disclosure settlement agreement with former Department of Health and Human Services Director Robert Gordon. It also inked one with former Unemployment Insurance Agency Director Steve Gray. 

Jason Wentworth

Gray's severance deal included $85,872, while Gordon's deal paid out $155,506 in severance.

The Republican-led House later disclosed it had reached one separation agreement worth $25,000 over the last five years. Liberal watchdog group Progress Michigan said three House agreements over the last seven years amounted to $59,500, and the Senate agreements added up to $632,144 in those years. 

“If we expect the people of Michigan to trust their government, we have to be open, honest, and transparent with their money and how we operate," Wentworth, R-Farwell, said in a Thursday statement. "No government office should be able to rely on secret deals with employees using taxpayer dollars — it’s simply not right, and we’re going to make sure it never happens in the House." 

Whitmer later lifted the non-disclosure portion of Gordon's agreement, but issued an executive directive allowing a state department to enter a severance deal that includes a non-disclosure clause if it ensures "confidentiality regarding an employment decision or dispute."

Wentworth noted the House policy goes "above-and-beyond" the changes made by Whitmer or even newly proposed legislation seeking to regulate the agreements. 

Rep. John Roth, R-Traverse City, introduced a plan that would cap state employee severance pay at 12 weeks pay unless it's part of a legal settlement. It would ban severances outside of legal claims for state officers, and require state offices to publish any agreements that included more than 12 weeks pay. 

Roth's legislation would prohibit non-disclosure clauses for state officers. 

"We are going to fix the problem for all of state government with Rep. Roth’s proposed legislation, and then hold ourselves to an even higher standard in the House,” Wentworth said in statement. “That is the sort of accountability and transparency the people expect of us and that will rebuild the people’s trust in their state government.”

Reps. Beau LaFave, R-Iron Mountain, and Steve Johnson, R-Wayland, sponsored a separate bill that would ban the state from entering or renewing a non-disclosure agreement with individuals who are elected or appointed to state office. 

Another bill from state Rep. Annette Glenn, R-Midland, would prohibit the state from entering into an employment contract with a state officer that included a non-disclosure provision, and punish violations of the rule with a civil fine of up to $2,500. 

Johnson, chairman of the House Oversight Committee, also has introduced a resolution that would allow him to subpoena Gordon to testify before the committee. 

Staff Writer Craig Mauger contributed.