Home Health & Hospice Week

Why? National Labor Relations Board General Counsel Jennifer A. Abruzzo issued a May 30 memo all but declaring war on non-compete agreements between employers and employees. The memo joins other recent Biden administration moves hostile to non-competes, including a Federal Trade Commission rule in January proposing to eliminate nearly all such agreements (see HHHW, Vol. XXXII, No. 3).

“Last year, the NLRB entered into memoranda of understanding with the Federal Trade Commission and the Department of Justice’s Antitrust Division, both of which have addressed the anticompetitive effects of non-compete agreements,” the NLRB notes in a release about memo GC 23-08.

“Non-compete provisions are overbroad,” Abruzzo argues in the memo. “They reasonably tend to chill employees in the exercise of [National Labor Relations Act] Section 7 rights, when the provisions could reasonably be construed by employees to deny them the ability to quit or change jobs by cutting off their access to other employment opportunities that they are qualified for based on their experience, aptitudes, and preferences as to type and location of work,” she says.

And “retaining employees or protecting special investments in training employees are unlikely to ever justify an overbroad non-compete provision because U.S. law generally protects employee mobility, and employers may protect training investments by less restrictive means, for example, by offering a longevity bonus,” Abruzzo maintains.

The memo singles out staff that aren’t top earners. “It is unlikely an employer’s justification would be considered reasonable in common situations where overbroad non-compete provisions are imposed on low-wage or middle-wage workers who lack access to trade secrets or other protectible interests,” Abruzzo says.

This is just the latest in a number of “highly controversial” memos from Abruzzo, note attorneys with law firm Proskauer Rose in a post on the firm’s labor relations blog.

“Abruzzo’s efforts to alter the labor and employment landscape continue,” observe attorneys Clifford Atlas, Jonathan Spitz, Richard Vitarelli, and Jonathan Siegel with law firm Jackson Lewis.

But despite the broader policy changes, Abruzzo’s memo isn’t the final word on the matter.

The memo “is not binding precedent of the NLRB and only an explanation of the General Counsel’s prosecutorial priorities,” explain attorneys Robert C. Nagle and Andrew M. MacDonald with law firm Fox Rothschild.