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 ›

Texas Federal Judge Strikes Down FTC’s Noncompete Ban

On August 20, 2024, Judge Ada Brown of the United States District Court for the Northern District of Texas set aside and barred the nationwide implementation and enforcement of the FTC’s Final Noncompete Rule. More ›

The 12 Days of California Labor and Employment Series – Day 4 "California and Non-Competes - It's a No-Go"

In the spirit of the season, we are using our annual "12 days of the holidays" blog series to address new California laws and their impact on California employers. On the fourth day of the holidays, my labor and employment attorney gave to me four calling birds, SB 699, and AB 1076. More ›

New York is Nearing a Ban on Non-Compete Agreements

On June 20, 2023, the New York State Legislature voted to pass a bill that will ban almost all non-compete agreements. Currently awaiting Governor Kathy Hochul's signature, the bill prohibits an "employer or its agent, or the officer or agent of any corporation, partnership, limited liability company, or other entity" from seeking, requiring, demanding or accepting a non-compete agreement from a covered individual. Additionally, the bill voids "every contract by which anyone is restrained from engaging in a lawful profession, trade or business of any kind." 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 ›

Florida Can Enforce Law Voiding Noncompete Contracts Between Doctors and Employers

Last week, the U.S. District Court for the Northern District of Florida held that Florida can enforce a law that voids noncompete agreements between doctors and their employers. The recently adopted legislation—section 542.336, Florida statutes—voids any noncompete agreements between physicians and specialty physician groups when the group employs all the physicians practicing a particular specialty within a given Florida county. In 21st Century Oncology, Inc. v. Moody, the Northern District reasoned that the law doesn't unlawfully interfere with private agreements, and any such impairment is outweighed by the law's significant, legitimate public purposes. More ›

Massachusetts Employers, It Is Time to Review Your Non-Competes

Massachusetts Governor Charlie Baker signed into law a comprehensive non-compete law that will take effect on October 1, 2018 (“the Act”). It applies to all non-competes entered after the effective date. The Act follows several attempts by the Massachusetts Legislature to agree on a reform that spanned several years. Here are the highlights: More ›

Management Rights Clause Does Not Give Management Right to Skip Bargaining Over Non-Compete and Confidentiality Agreement D.C. Court of Appeals Says

In Minteq v. NLRA, the United States Court of Appeals for the District of Columbia Circuit held an employer committed an unfair labor practice under Section 8 (a)(5) by failing to notify and bargain with a union over its requirement that new employees sign a non-compete and confidentiality agreement as a condition of employment. More ›

Court Dismisses Case Filed Under the Defend Trade Secrets Act

Earlier this year, we notified you about the passage of the Defend Trade Secrets Act of 2016 (DTSA) and how it affects employers.  On August 8, 2016, a U. S. District Judge in the Southern District of Florida dismissed one of the first cases filed under the DTSA, M.C. Dean, Inc. v. City of Miami Beach, Florida, Case No. 16-CV-21731 (S.D. Fla.)  More ›

Cracks in the Fifield Armor?: New Dissent Marks First big Challenge to Illinois' Bright-Line Restrictive Covenant Rule

When continued employment is the sole consideration for a post-employment restrictive covenant (such as a noncompetition agreement), the Illinois Supreme Court requires that an employee be continually employed for a substantial period of time. Generally, a period of two-years is an adequately substantial period.  A strong dissent in a new Illinois opinion suggests that not all judges are on board with the bright-line rule recently endorsed by several Illinois courts. More ›