In a memo released May 30, National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo announced that noncompete agreements violate the National Labor Relations Act (NLRA). The announcement, which applies to nonunionized and unionized employers, may result in unfair labor practice charges for any employer that uses noncompetes, said Thomas Payne, an attorney with Barnes & Thornburg in Indianapolis.
However, a manager's or supervisor's noncompete would seemingly be unaffected by the memo because the NLRA applies only to nonmanagerial, nonsupervisory staff, said James Redeker, an attorney with Duane Morris in Philadelphia. Managers and supervisors are the most likely to have noncompetes, he said.
Memo's Contents
The memo explains that overbroad noncompete agreements are unlawful because they chill employees from exercising their rights under Section 7 of the NLRA, which protects employees' rights to take collective action to improve their working conditions.
"This denial of access to employment opportunities interferes with workers engaging in Section 7 activity in a number of ways," Abruzzo said in the memo. " [F]or example, workers know that they will have greater difficulty replacing their lost income if they are discharged for exercising their statutory rights to organize and act together to improve working conditions; their bargaining power is undermined in the context of lockouts, strikes and other labor disputes; and their social ties and solidarity...
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