A recent National Labor Relations Board (“NLRB”) general counsel memo addresses two topics vis-à-vis the National Labor Relations Act (“NLRA”): non-compete provisions and stay-or-pay provisions.
Regarding non-compete provisions, the NLRB general counsel proposes ramping up the cost to employers for agreements deemed illegal. Specifically, she recommends make-whole relief for employees affected by illegal non-compete agreements, arguing that rescinding the agreement is an insufficient remedy.
“Stay-or-pay” agreements generally refer to agreements under which an employee must pay the employer if the employee leaves the job within a specified period. In the memo, general counsel posits that many may be unlawful (namely, when they infringe upon employees’ Section 7 rights), but does include a proposed framework “for assessing the lawfulness of such provisions.”
Business Takeaway: While general counsel memoranda are likely to influence NLRB enforcement strategy, they do not constitute a new rule of law . For now, consider how these positions might affect your business should the NLRB adopt them, and stay tuned for further developments.