According to the NLRB’s General Counsel, nearly all non-compete provisions contained in employment agreements are invalid restrictions on employee’s rights under the NLRA
Non-competes are only valid in “special circumstances,” which do not include desire to avoid competition; to protect confidential information; or to retain talent
The memo itself is not law, but the General Counsel wants cases involving non-competes sent to the Division of Advice to shape precedent and redefine current law
In another unprecedented move (and maybe the most audacious yet), the National Labor Relations Board General Counsel, Jennifer Abruzzo, issued a memorandum to all Regional Directors, Officers-in-Charge, and Resident Officers setting forth her belief that non-compete provisions contained within employment contracts, including severance agreements, are generally unlawful. The memo also requires that all cases involving non-compete provisions now must be submitted to the Division of Advice.
According to Abruzzo, non-compete provisions are unlawful because they “reasonably tend to chill employees in the exercise of Section 7 rights” to engage in concerted activity under the National Labor Relations Act. These protections extend to all private-sector employees covered by the NLRA, regardless of whether the employer’s workforce is presently unionized or the employee is a member of a union.
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