Non-Compete Agreements Update

NLRB General Counsel Jennifer Abrusso recently sent a memo to regional directors and other officers to express her view that non-compete provisions in employment contracts and severance agreements violate the NRLA (with some exceptions, e.g., certain managers or supervisors). More specifically, Abrusso’s opinion relates to Section 7 rights, regardless of whether the workforce at issue is unionized. While the memo itself does not constitute a new rule, it does forecast how the NLRB is likely to treat non-compete agreements moving forward. Moreover, and in conjunction with FTC’s proposal on non-compete agreements activity on the state level,  the scope of enforceable non-compete agreements continues to narrow.

Business Takeaway: While the future of non-compete agreements may seem bleak to many business owners relying upon them, there is also likely to be significant litigation before the dust settles. As we continue to wait for an actual change in law (via NLRB decision, FTC final rule, etc.), do consider revisiting your non-compete and reevaluating which employees should sign the agreement. While non-compete agreements (as we know them) may ultimately be going away, there remains significant value in protecting your proprietary and confidential information and otherwise protecting business from unfair competition. Contact us if you need assistance with revisiting your non-compete agreements.