Concerted Action Hiding in Broad Daylight
On May 30, 2023, the General Counsel of the National Labor Relations Board (“NLRB”) issued a memo (“Memo”) opining that, except in limited circumstances, non-compete agreements violate the National Labor Relations Act. See GC 23-08.
This Memo had an immediate impact on the private sector. Private sector companies began questioning and editing non-compete agreements, including when the employee executing these non-competes was either a salesperson or mid-level management. Many companies had to balance the risk of an employee utilizing proprietary information in the marketplace versus the risk of defending an unfair labor practice charge by the NLRB.
On Valentine’s Day, February 14, 2025, the NLRB’s Acting General Counsel rescinded the prior May 30, 2023, Memo. For several reasons, this rescission is appropriate and returns protections for private sector employers where employees have regular access to proprietary information.
Contact Rita Lauer if you have any questions concerning non-compete agreements.