Non-Compete Agreements Come Under More Fire

On May 30, 2023, National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo issued a memo advising NLRB regional directors that non-compete agreements generally infringe on employees' rights under Section 7 of the National Labor Relations Act (NLRA). As a result, employers should examine their existing restrictive covenant agreements for "Section 7" concerns and understand that such agreements may carry legal risk going forward.

The General Counsel's View on Non-Compete Agreements

In the May 30 memo, General Counsel Abruzzo advised that, with limited exception, employers commit unfair labor practices (ULPs) in violation of the NLRA by proffering, maintaining or enforcing non-compete agreements because "[g]enerally speaking, this denial of access to employment opportunities chills employees from engaging in Section 7 activity."