Noncompete Agreements

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National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo issued an important policy memorandum this week. In GC Memorandum 25-01, Abruzzo asserts that most “stay-or-pay” provisions, where workers agree to repay their employer for certain benefits if the employee prematurely leaves employment, should be found unlawful unless narrowly tailored. The memo also sets forth broad remedies GC Abruzzo intends to seek if such provisions are held unlawful. In addition, following up on her memo that most non-compete agreements are unlawful, GC Abruzzo laid out the remedies she will seek from the Board where it holds that an employer has unlawfully enforced or applied a non-compete agreement.

This special two-part blog will cover both subjects. In this edition, we will cover the remedies proposed by the GC for employees subject to non-compete provisions found unlawful by the Board. Next week, Part II of this blog will address stay-or-pay provisions, the GC’s legal position that such provisions are presumptively unlawful, and the remedies she will seek for employees subject to stay-or-pay provisions.Continue Reading NLRB GC to Seek Broad Remedies for Non-Compete and Stay-or-Pay Provisions – Part I

On August 20, 2024, the U.S. District Court for the Northern District of Texas set aside the Federal Trade Commission’s (FTC) Non-Compete Rule. As discussed in our prior e-lert on July 5, 2024, the FTC Non-Compete Rule would essentially ban all non-compete agreements in the United States and require employers to notify employees currently subject to non-competes that the restrictions were void. The Texas court previously preliminarily enjoined the Rule as to only the parties in the case, as we noted in our prior e-lert. The court’s August 20 decision set aside the Rule, meaning the Rule will not be enforced or take effect on September 4, 2024.Continue Reading Federal Court Finds FTC Non-Compete Rule Unlawful

On July 3, 2024, the U.S. District Court for the Northern District of Texas issued a preliminary injunction against the Federal Trade Commission’s (“FTC”) “Non-Compete Rule.” As we discussed in our April 24, 2024 E-Lert, on April 23, 2024, the FTC issued the Non-Compete Rule, banning nearly all non-compete provisions between employers and employees. Two of the five FTC Commissioners voted against issuing the Non-Compete Rule and offered dissenting views as to why the Commission should not have issued the Rule. Almost immediately, litigation was commenced by private parties to block the Non-Compete Rule from coming into effect on September 5, 2024.Continue Reading Another Day, Another Limited Preliminary Injunction – This Time on the FTC’s Non-Compete Ban

On April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 to issue a Final Rule banning nearly all non-compete clauses in employment agreements nationwide. As set forth in the FTC’s fact sheet, non-compete provisions are “an unfair method of competition” and therefore violate the Federal Trade Commission Act. The U.S. Chamber of Commerce, however, has already filed suit to block the Final Rule. Continue Reading FTC Bans Nearly All Non-Compete Agreements – For Now…

The Maryland General Assembly’s 2024 session ended at midnight on Monday, April 8. A number of employment bills that were passed will have a significant impact on employers, including another delay to the forthcoming paid family and medical leave insurance (FAMLI) program, a new wage range posting mandate, expanded pay stub notice requirements, and additional discrimination protections, including an expansion of the equal pay law. Employers will also face increased penalties for occupational safety and health violations. Additionally, there was a revision to the law restricting the use of non-compete agreements to make it applicable to certain health care providers and veterinarians.Continue Reading New Employment Laws in Maryland – Changes to Paid Family and Medical Leave Insurance, Wage Range Posting Requirements, New Discrimination Protections and More (and a Webinar!)

Following the Federal Trade Commission’s proposed near-total ban on non-compete agreements, which we wrote about here, and an increasing number of state laws limiting or banning such agreements, another federal agency official is piling on. On May 30, 2023, National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo issued a memo expressing her position that noncompete agreements violate the National Labor Relations Act (NLRA). Specifically, GC Abruzzo asserts that noncompete agreements chill employees’ exercise of rights guaranteed by Section 7 of the NLRA unless the noncompete agreement is “narrowly tailored to address special circumstances” that justify the interference with employees’ Section 7 rights. Absent narrow tailoring to address special circumstances, GC Abruzzo contends that proffering, maintaining, or enforcing noncompete agreements violates the NLRA.Continue Reading The NLRB General Counsel Joins the War on Noncompete Agreements