On May 30, 2023, National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo (GC Abruzzo) issued Memorandum GC-23-08 (GC's Memo), setting forth her opinion that most non-compete provisions violate the rights afforded to employees under Section 7 of the National Labor Relations Act (NLRA). Although the NLRA applies to almost all private employers, its protections generally extend only to non-supervisory employees (except if a supervisor is retaliated against for opposing an unfair labor practice).
Commiserate with recent trends across the landscape of employment law, the GC's Memo posits that the "proffer, maintenance, and enforcement" of non-compete provisions violate the NLRA's Section 7 rights afforded to employees. Such rights protect employees' ability to engage in self-organization, collective bargaining, and other protected concerted activity. The GC's Memo provides that any non-compete provision which "reasonably tends to chill" an employee's right to engage in Section 7 activity violates the NLRA unless the employer can show that "it is narrowly tailored to address special circumstances justifying the infringement."
Unquestionably, this position was foreshadowed in the NLRB's recent McLaren Macomb decision and GC Abruzzo's subsequent Memorandum GC 23-05 providing guidance thereon. The GC's Memo likewise falls in step with state laws outright banning non-competes in recent years (with Minnesota's ban effective July 1, 2023) and...
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