On May 30, 2023, General Counsel for the National Labor Relations Board (“NLRB”) issued Memorandum GC 23-08 (“Memo 23-08”), asserting that many employee non-competes violate the National Labor Relations Act (“NLRA”) because they interfere with employees’ exercise of their rights under the NLRA. The General Counsel sets forth a proposed legal standard under which an employee non-compete will be found to violate the NLRA if it reasonably tends to “chill” employees’ exercise of their Section 7 rights unless it is “narrowly tailored” to the special circumstances that justify infringing on employee rights. Because the NLRA protects most employees regardless of whether the employer’s workforce is unionized or not, all employers should be mindful of the legal standard proposed by the NLRB’s General Counsel.1
The General Counsel’s proposed legal standard follows the reasoning in the NLRB’s recent decision in McLaren Macomb, 372 NLRB No. 58 (Feb. 21, 2023). In McLaren Macomb, the NLRB ruled that overbroad confidentiality and non-disclosure provisions in severance agreements for certain employees—and even the mere offering of severance agreements with such overbroad provisions—violated the NLRA because such provisions may chill employees in the exercise of their NLRA rights.
The NLRB General Counsel’s Proposed Legal Standard
The NLRB’s General Counsel argues in Memo 23-08 that “the proffer, maintenance, and enforcement of” non-compete agreements2 generally violate Sections 7 and 8...
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