NLRB General Counsel targets noncompetes with rank-and-file employees

In the latest effort by the federal government to curtail the use of noncompetes—which are traditionally governed by state law—National Labor Relations Board (NLRB) General Counsel (GC) Jennifer Abruzzo issued a memorandum on May 30 claiming noncompete provisions in employment and severance agreements violate the National Labor Relations Act (NLRA) when they interfere with an employee’s exercise of rights under Sections 7 and 8(a)(1) of the Act.

The memo also says a broad noncompete provision could “chill” an employee from engaging in activities protected by the Act. This development comes on the heels of the Federal Trade Commission’s (FTC) January 5 proposed rule that would in large part ban noncompete agreements.