Protected Concerted Activity Hiding in Broad Daylight – Good Intentions Crushed by the NLRB
On October 7, 2024, the Office of General Counsel (“OGC”) for the National Labor Relations Board (“NLRB”) issued a memorandum outlining its position that employer “stay or pay” provisions are disfavored by the NLRB. Basically, stay or pay provisions are contained in employment documentation wherein an employer issues a signing bonus, training repayment agreements or educational repayment agreement where the employer either pays, or loans money to the employee. However, the repayment of the loan or sign-on bonus is conditioned upon the employee continuing employment for a certain length of time as repayment is usually required upon termination or separation from employment.
To justify its Negative Nelly attitude about the stay or pay provisions, the OGC proffered that, “like noncompete agreements, stay or play provisions both restrict employee mobility, by making resigning from employment financially difficult or untenable, and increase employee fear of termination for engaging in activity protected by the Act.”
The OGC then outlined stay or pay provisions that it urged the Board to find unlawful under the National Labor Relations Act (“Act”). These provisions include:
- Stay or pay provisions tied to mandatory training that the employer requires the employee to attend or obtain;
- Repayment of fees that are higher than the costs of the training provided to the employee;
- Relocation or sign-on bonus payments that fail to include an option between the employee taking an up-front payment or deferring the receipt of the bonus until the end of the stay or pay time period; and
- A repayment provision where the employee is terminated for “any reason whatsoever.”
Now, this position is coming from the OGC, and there is absolutely no NLRB decision that affirms this position yet. However, for those employers who provide these incentive sign-on bonuses and repayment plans to their employees, you need to be aware of this storm brewing before it hits your doorstep.
If you have questions or concerns relating to these issues, please contact Rita Lauer at Maddin Hauser. We are here to assist you in avoiding employment or labor problems before they become a problem.