What has the federal government decided regarding non-compete agreements and how does it affect me?
On May 30, 2023, the federal government did something that is very rare nowadays: it expanded the rights of employees in the workplace. The National Labor Relations Board (“NLRB”) is a federal body which enforces both laws surrounding unions as well as laws that protect the ability of employers to organize in the workplace. Among the rights that it protects are 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.” 29 U.S.C. § 157. In furtherance of these rights, the NLRB has determined that the vast majority of non-compete agreements are illegal.
What is a non-compete agreement?
A non-compete agreement is a tool that employers use to protect their share of the market and to discipline their employees. The basic idea of a non-compete agreement is that an employee agrees to not work for any of the employer’s competitors (or even within the same field) within a set geographic area and for a set time period. While some non-competes have been previously shot down by courts for being overly broad, they have generally been upheld as a rule. On top of whether or not a non-compete is enforceable, there is also the matter of whether an employee would even attempt to take their employer to court over the matter. When a non-compete is in place, many employees would probably be extra hesitant as to quit or do something that could get them fired.
Best Non-Competition Contract Attorney Blogs on Point:
- Will A Court Uphold My Non-Compete If My Former Employer Sues Me? I Need A Lawyer!
- Can I Be Fired If I Refuse To Sign A Non-Compete Agreement? Best Lawyer Reply!
- Is My Non-Compete Agreement Enforceable If I Was Fired? I Need An Employment Lawyer!
What exactly has the national labor relations board decided regarding no-competition contract?
The NLRB has approached the issue of non-compete agreements and realized the negative effect that non-compete agreements have on the rights of employees. In a memorandum issued by Jennifer Abruzzo, General Counsel of the NLRB, the NLRB stated that the threat of not being able to work in the same field is a “chilling” effect on employee’s rights through the following ways:
- “First, they chill employees from concertedly threatening to resign to demand better working conditions…”
- “Second, they chill employees from carrying out concerted threats to resign or otherwise concertedly resigning to secure improved working conditions…”
- “Third, they chill employees from concertedly seeking or accepting employment with a local competitor to obtain better working conditions…”
- “Fourth, they chill employees from soliciting their co-workers to go work for a local competitor as part of a broader course of protected concerted activity…”
- “Finally, they chill employees from seeking employment, at least in part, to specifically engage in protected activity with other workers at an employer’s workplace.
In other words, the NLRB took the mask off of non-compete agreements to expose their true purpose: to help employers coerce their employees by threatening them with a long period of unemployment after being fired or forced to resign. Naturally, this implied threat discourages employees from coming together to bargain with their employers for better rights. Discouraging employees from coming together to fight for their rights is in and of itself a violation of the National Labor Relations Act. Therefore, the NLRB has determined that non-compete agreements that create this implied threat against those who participate in activities that the Act protects are illegal.
Best No-Compete Contract Lawyer Blogs on Point:
- Top Employment Lawyer Reply: Is A Non-Compete Agreement Enforceable Even Though I Never Actually Signed One?
- I Have A Non-Compete Agreement: What State Law Applies?
What is the catch?
It should be pointed out that the NLRB has not determined that every non-compete agreement is illegal. Non-compete agreements that are narrowly tailored so as to no affect the rights of an employee under the National Labor Relations Act are still fine. For example, non-compete agreements that are focused on protecting trade secrets are still fine. Do not worry though, the NLRB has already taken steps to make sure that this exception will not be turned into a loophole.
The question moving forward is whether or not this memorandum will stay in force when it is challenged. The NLRB is not the final arbiter of labor law in America: the federal court system is. As anyone who has watched our court system as of late knows, monied interests will do their best to see the NLRB position overturned. Only when this position of the NLRB is tested and approved of in a court of law, will it be set in stone.
If you are under a non-compete agreement and want to know if your rights have been violated, then you need to call the right attorney.
Best Violating Noncompete Contract Law Firm Blogs on Point:
- I Was Sued For Breaching My Noncompete – What Now?
- Is A No-Compete Contract Enforceable If I’m A Single Mom And Can’t Get A Job Because Of It? Best Attorney Reply!
How do I sue my employer?
Best Employment Lawyer Answer: The first step in vindicating your rights is to call the right attorney to schedule a free and confidential consultation. (Read: What is the Spitz No Fee Guarantee?; Why Having Skilled Employment Attorneys Is Critical). Call our lawyers in Ohio, Michigan, Kentucky and North Carolina to get help now. Spitz, The Employee’s Law Firm and its experienced attorneys are dedicated to protecting employees’ rights and solving employment disputes.
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