NLRB General Counsel Cites Top Five Problems With Noncompetes Under the National Labor Relations Act

On May 30, 2023, NLRB General Counsel Jennifer Abruzzo released a memorandum taking a strong position against the use of noncompete provisions in employment contracts, stating that such provisions generally violate the National Labor Relations Act except in limited circumstances. She opined that any provision in an employment agreement violates the NLRA if it reasonably tends to “chill” employees in the exercise of their Section 7 rights unless it is narrowly tailored to address special circumstances justifying the infringement on employee rights.

Section 7 protects the right of employees to self-organize; to form, join or assist labor organizations; to bargain collectively through representatives of their own choosing; and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.

Now calling to extend this standard to noncompetes, Abruzzo argues that offering, maintaining and enforcing an overbroad noncompete agreement reasonably tends to “chill” employees from their exercise of Section 7 rights. Employees may reasonably construe noncompete agreements as barriers to their ability to quit or change jobs by severely limiting employment mobility.

Abruzzo highlights five specific types of activities protected under Section 7 that are “chilled” by noncompetes:

1. Concertedly threatening to resign to demand better working...

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