NLRB General Counsel Issues Memorandum Arguing Noncompetes Are Illegal

In May 2023, National Labor Relations Board's General Counsel Jennifer Abruzzo issued Memorandum GC 23-08, taking the position that noncompete provisions violate the National Labor Relations Act (NLRA) except in limited circumstances. Section 7 of the NLRA protects employees' right to unionize, to join together to advance their interests as employees, and to refrain from such activity. Section 7 of the NLRA applies to both unionized and non-union workplaces.

As we first explained in our June 12, 2023 alert, General Counsel Abruzzo argues that privately negotiated noncompete agreements could "reasonably tend to chill employees in the exercise of Section 7 rights[.]" Last week, General Counsel Abruzzo doubled down on this position by issuing Memorandum 25-01 on October 7, 2024 (the Memo), opining that certain stay-or-pay provisions also infringe on employees' Section 7 rights and therefore violate Section 8(a)(1) of the Act.