Published June 6, 2023
The Office of the General Counsel for the National Labor Relations Board (NLRB) recently issued a Memorandum opining that except in limited circumstances, the proffer, maintenance, and enforcement of noncompete agreements interferes with employees’ exercise of rights under Section 7 of the National Labor Relations Act (NLRA) and thus violates the NLRA. This Memorandum comes on the heels of the Federal Trade Commission’s announcement of a proposed ban on noncompete agreements in January 2023.
Earlier this year the NLRB issued the decision McLaren Macomb, 372 NLRB No. 58 (2023), in which it prohibited employers from offering employees severance agreements with nondisclosure and confidentiality provisions that broadly waive employees’ rights under the NLRA. The NLRB Office of the General Counsel then issued a Memorandum providing guidance in the wake of the McLaren Macomb decision and opining that other common provisions may also violate Section 7 of the NLRA, such as noncompetes and nonsolicitation provisions.
Given the quickly changing legal landscape about the validity and enforceability of noncompete agreements and other employee restrictive covenants, employers should consult counsel to analyze the issues and risks when entering into or enforcing any such agreements.
If you would like to discuss what impact this Memorandum could have on your company or would like an employment attorney to review a severance agreement, please contact any member of Ryan Swanson’s Employment Rights, Benefits & Labor Group.
