The NLRB Is A Non-Compete Hater: Should You Worry?



Now what? The General Counsel of the National Labor Relations Board (NLRB) released a memo yesterday slamming the use of non-competes. Does this sound familiar? Maybe, because a memo asserting that provisions in severance agreements violate Section 7 rights under the NLRA was released in February. Just before that, the Federal Trade Commission (FTC)  came down on non-competes. Now the NLRB and its agents will proceed under the rule that non-compete agreements chill an employee’s right to quit or change jobs as well as engage in protected, concerted activity in the workplace. With exceptions… .

Should you worry? Not really. We all know that non-competes for rank and file workers and non-managers are not the best practice.  As we have suggested in the past, if you have widely distributed templates or handbooks with restrictive language on disparagement or confidentiality, get rid of them. But non-competes for certain employees still have a place.  Carefully crafted non-compete agreements for managers, supervisors, owners and officers are carved out because they are not covered by Section 7 of the NLRA. Restricting managers, owners and high level employees is not prohibited. Non-solicitation and trade secret language–very valuable tools–are still allowed as well. As long as the non-compete is proffered to these employees and complies with state law (cue the handy state law chart), they are valid.

Questions? We can help. We have a fixed fee service to review your restrictive covenant documents and language for compliance. We can also review any non-compete agreements and of course, answer any questions you have. Contact us.