Impact for Employers: The NLRB General Counsel Doubles Down on Restrictive Covenants and Stay-or-Pay Provisions

The General Counsel of the National Labor Relations Board ("NLRB") issued Memorandum GC 25-01 on October 7, 2024, which establishes her intent to "urge the Board not only to find certain non-compete provisions unlawful, but also, as fully as possible to remedy the harmful effects on employees when employers use and apply them."

The General Counsel has proposed a 60-day period, starting from the issuance of the October 7 Memorandum, for employers to address and rectify any existing "stay-or-pay" provisions that may not align with legitimate business interests. This directive necessitates that employers quickly evaluate their current provisions in light of the new guidelines, as many restrictive covenants and "stay-or-pay" clauses are likely to violate Section 7, according to the General Counsel's criteria. More ›

U.S. Supreme Court Rejects Relaxed Standard for Injunctive Relief Under Section 10(j) of the National Labor Relations Act

On June 13, 2024, the U.S. Supreme Court, in Starbucks Corp. v. McKinney (National Labor Relations Board), No. 23-367, rejected the arguments of the National Labor Relations Board (the “Board”) to relax the standard that a district court must employ in deciding whether to implement injunctive relief under Section 10(j) of the National Labor Relations Act (the “Act”).  More ›

NLRB Reverses 50-Year Precedent and Lessens Standard for a Bargaining Order Without a Secret Ballot Election

The National Labor Relations Board (NLRB) reversed over fifty years of established precedent on August 25, 2023, when it decided to overrule its 1971 decision in Linden Lumber and reinstate a modified version of its 1949 Joy Silk doctrine. The practical impact of the NLRB's decision in Cemex Construction Materials Pacific, LLC is that recourse to a private ballot election to test a union's claim of majority support may decline. This decision also likely will limit the right of employees to a private ballot election free of coercion as they decide whether to support a union as their exclusive bargaining representative. More ›

NLRB General Counsel Memo Argues Non-Compete Agreements Violate the NLRA

The General Counsel of the National Labor Relations Board (the Board) took aim at non-compete and non-solicitation agreements in Memorandum GC 23-08, issued on May 30, 2023. The General Counsel of the Board, Jennifer Abruzzo, said she believes that except in limited circumstances, the "proffer, maintenance, and enforcement of non-compete agreements" violates Section 8(a)(1) of the National Labor Relations Act (the Act). Memoranda such as this reflect the prosecutorial perspective of the General Counsel's office and direction to the Regional Directors on case handling. That said, Memorandum GC 23-08 is not a decision of the Board, a rule promulgated by the Board under its rule-making authority, or the result of a challenge to a Board decision in federal court. However, it certainly forecasts how this General Counsel and the Regions will assess non-competes and handle unfair labor practice charges involving these covenants. More ›

NLRB Decision that Broadly-Worded Confidentiality Provisions in Separation Agreements are Unlawful Raises Important Questions

The National Labor Relations Board (NLRB) recently issued a controversial decision concerning the use of non-disparagement and confidentiality provisions by employers in separation agreements. In McLaren Macomb and Local 40, RN Staff Council Office and Professional Employees International Union, AFL-CIO (Case 07-CA-263041), the NLRB found that including broadly-worded non-disparagement and confidentiality provisions in a separation agreement was unlawful, notwithstanding the lack of an intent to chill or limit the exercise of Section 7 rights of employees under the National Labor Relations Act (the Act). More ›

NLRB Continues Regulatory Ping Pong With New Proposed "Joint Employment" Standard

On September 7, 2022 the National Labor Relations Board (NLRB or the Board) issued a new Proposed Rule governing joint employer status. The proposed rule seeks to change the standard for determining whether two collaborating employers will be considered joint employers under the National Labor Relations Act (Act). If finalized, the new rule is expected to take effect in 2023. More ›

General Counsel of NLRB Seeks to Revoke Right of Employers to Recognize a Union on a Voluntarily Basis and Insist on a Private Ballot Election

Voluntary recognition of a union as the exclusive bargaining representative for employees within an identified bargaining unit of the employer can have potentially game-changing consequences for an employer. However, if the National Labor Relations Board (NLRB or Board) agrees to adopt the position of its General Counsel in a brief filed on April 11th in Cemex Construction Materials Pacific, LLC, No. 28-CA-230115., the landscape regarding union representation of employees in the workplace will change dramatically. It will become much easier for unions to organize and more difficult for employers to insist upon a private ballot election. Employees also will lose the right to vote in a private ballot election in many situations. More ›

The Scabby Saga Continues

The battle over Scabby the Rat took another turn on July 21, 2021, when the National Labor Relations Board issued its anticipated decision and order in International Union of Operating Engineers, Local 150 and Lippert Components, Inc.

Scabby is a large, 12-foot-high inflatable rat with red eyes, menacing fangs, and claws. Unions often use it to inform the public that they have a dispute with a non-union employer. The rat often is used in construction trades when a non-union contractor provides services at a worksite. Additionally, as part of street theatre, many unions use the rat—along with large banners and union representatives standing nearby—to publicize their disputes with non-union employers, known as the primary employer for labor law purposes. More ›

U.S. House Seeks Drastic Revision of Labor Law with Protect the Right to Organize Act of 2021

In a Hinshaw Insights for Employers Alert, we consider the drastic revisions to the National Labor Relations Act and federal labor policy contemplated by the Protect the Right to Organize Act of 2021. The bill was passed with little fanfare by the U.S. House of Representatives last month.

Read the full alert

NLRB Weighs in on the Issue of Employer Neutrality Agreements and Section 7 Rights

The National Labor Relations Board (Board) issued a Guidance Memorandum (Guidance) on September 4, 2020, addressing the analysis of employer assistance in union organizing efforts. The Guidance has been provided as a response to requests from regional directors on a series of issues relating to the "amount of lawful support an employer can provide to a union that is attempting to organize its employees." More ›