KMK Law Management Rights Blog

If you follow the news, you are probably aware that non-compete agreements are under attack on several levels. This episode will consider three primary sources of these attacks on non-compete agreements:

1. The Federal Trade Commission (FTC) Proposed Rule banning non-compete agreements;
2. The NLRB General Counsel Memorandum GC 23-08 (May 30, 2023) indicating that non-compete agreements may violate section 7 of the National Labor Relations Act; and
3. State laws banning or curtailing enforcement of non-compete agreements.

See the FTC Proposed Rule here.

See the NLRB General Counsel ...

Employers seeking to enforce non-compete agreements against their former employees will face a new hurdle following the latest news out of Washington, DC. National Labor Relations Board (“NLRB”) General Counsel Jennifer A. Abruzzo, who is responsive for the investigation and prosecution of unfair labor practice cases and for the general supervision of NLRB field offices, released a memorandum today announcing her interpretation that many non-compete agreements violate the National Labor Relations Act (“NLRA”) and thus are not enforceable. She has directed NLRB field offices to submit cases involving non-compete agreements for further investigation.

On February 21, 2023, the National Labor Relations Board (NRLB or the “Board”) issued a decision in Mclauren Macomb, 372 NLRB No. 58 (2023), holding that severance agreements that contain broad confidentiality and/or non-disparagement provisions violate Section 7 of the National Labor Relations Act (NLRA or the “Act”) because they tend “to interfere with, restrain or coerce employees’ exercise of the rights guaranteed in Section 7” of the Act.  Section 7 of the NLRA guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” as well as the right “to refrain from any or all such activities.”  

On July 21, 2020, the National Labor Relation Board (the “NLRB”) issued its decision in General Motors LLC, 14-CA-197985 369 NLRB No. 127 (2020), adopting a motivating factor test, for cases involving abusive or offensive statements made by employees in the course of “concerted activities” which are otherwise protected under Section 7 of the National Labor Relations Act (the “NLRA”).  The test, also known as the Wright Line standard, focuses on whether the employee’s Section 7 activity was a motivating factor in an employee’s discipline or discharge and shifts the ...

What a difference a presidency makes. Under President Trump, the National Labor Relations Board is continuing to take steps to distance itself from some of the more controversial decisions it issued during the administration of President Barack Obama.  This latest action came on January 26, 2018, when the Board announced it was extending the deadline for filing responses to the Board's Request for Information, regarding the Board’s Representation Election Regulations.

NLRB axes Lutheran Heritage Standard

In a 3-2 decision, the NLRB overruled its prior decision regarding how it analyzes whether a facially neutral workplace rule, policy or employee handbook provision interferes with the exercise of rights protected by the National Labor Relations Act (“NLRA”).

In a reversal of precedent, a divided National Labor Relations Board (“NLRB”) held yesterday that employees have a right to use their employers’ email systems for non-business purposes, including statutorily protected communications regarding the terms and conditions of their employment and regarding union organizing efforts. See Purple Communications, Inc., 361 NLRB No. 126 (December 11, 2014).  The NLRB’s ruling stemmed from a case brought by the Communications Workers of America union after it unsuccessfully attempted to organize employees of Purple Communications, Inc., a company that provides interpreting services for the deaf and hearing-impaired.  The union argued that prohibiting the company’s workers from using the company’s email system for non-business purposes and on behalf of organizations not associated with the company interfered with the CWA’s organizing efforts. 

Demonstrating the NLRB’s increased focus on limiting employer confidentiality rules, a three member panel of the NLRB recently ruled in DirecTV U.S. DirecTV Holdings LLC, 359 NLRB No. 4 (January 25, 2013) that four work rules maintained by DirecTV were unlawful restrictions on employees’ Section 7 rights and that the employer did not repudiate the rules.