As you may recall, we recently published a blog about the FTC's consideration to ban non-compete agreements. Now, the National Labor Relations Board has taken their stance.
On May 30, 2023, NLRB General Counsel Jennifer Abruzzo issued a memo to all Regional Directors, Officers-in-Charge, and Resident Officers, setting forth her view that the proffer, maintenance, and enforcement of non-compete provisions in employment contracts and severance agreements violate the National Labor Relations Act (NLRA) except in limited circumstances.
The NLRA is a federal law that protects employees' rights to organize and bargain collectively. Section 7 of the NLRA specifically protects employees' rights to "concerted activity for the purpose of collective bargaining or other mutual aid or protection."
General Counsel Abruzzo's memo provides several examples of how non-compete agreements can chill employees' Section 7 rights. For example, an employee who is considering quitting her job to join a union may be less likely to do so if she knows that she will be bound by a non-compete agreement.
Similarly, an employee who is considering organizing her coworkers may be less likely to do so if she knows that she will be bound by a non-compete agreement. General Counsel Abruzzo's memo is a significant development in the law. It is the first time that the NLRB has taken a position on the legality of non-compete agreements. The memo is likely to have a major impact on the use of non-compete agreements in the workplace.
If you have any questions about the NLRB's new stance on non-compete agreements, you should contact us today.
Source: https://www.nlrb.gov/news-outreach/news-story/nlrb-general-counsel-issues-memo-on-non-competes-violating-the-national
