NLRB targets no-poaching agreements

In 2023, National Labor Relations Board (NLRB) General Counsel (GC) Jennifer Abruzzo issued two memoranda addressing nondisparagement agreements, noncompetes, and a variety of other contractual terms such as nonsolicitation and no-poaching agreements. The NLRB currently believes such agreements violate section 7 of the National Labor Relations Act (NLRA), with narrowly construed exceptions. The bulk of the memos were directed at employer-to-employee conduct.

Following the memos, the Federal Trade Commission (FTC) issued its proposed regulation regarding noncompetes, which was subsequently overturned by a Texas court. While the FTC issue remains open-ended, as the government has indicated an intent to appeal this determination, the NLRB is zealously enforcing its new expectations in a variety of regions.

Employer-to-employer unfair labor practice

On September 12, 2024, the NLRB issued an unfair labor practice (ULP) complaint in Newark, New Jersey, based on employer-to-employer conduct. The company at issue consistently included a no-poaching clause within its vendor agreements. Specifically, the company contracting with the vendor could not attempt to hire, solicit, or encourage any of the vendor employees to become employees of the company receiving the vendor’s services. In the complaint, the NLRB specifically states that provisions of this type, including the one in the vendor’s contract, “interfere with, and are inherently destructive of, workers’ rights under Section 8(a)(1) and (3) of the National Labor Relations Act.”