Non-compete agreements, whether stand-alone or in employment or severance agreements, almost always violate the National Labor Relations Act, according to the National Labor Relations Board General Counsel, Jennifer Abruzzo.
A non-compete is a contractual term between an employer and a worker that goes into effect once the employee stops working for that employer. It attempts to stop the employee from accepting certain jobs or operating a business after their employment ends. As a result, non-competes make employees feel that they cannot quit or change jobs because they fear they are not allowed to pursue certain employment opportunities. The Federal Trade Commission (FTC) is currently considering whether to ban non-compete agreements in employment contracts.
The NLRA is a federal labor law that protects employees who take action to better their workplace conditions. Employers cannot interfere with, restrain, or coerce employees in their exercise of that right.
The NLRB General Counsel explains that non-competes make employees feel that they cannot exercise their labor law rights. A non-compete makes it harder for an employee to find a new job in the event they are fired for speaking up about their working conditions. As a result, employees are less likely to take legal and protected actions to advocate for themselves and their coworkers. Even if an employee agreed to a non-compete, it is still illegal according to the NLRB General Counsel because employees cannot give up their labor rights through a contract.
The General Counsel explained that there are narrow exceptions where non-compete agreements could be lawful under federal labor law, such as an agreement so narrow that it does not seriously infringe on employees’ rights, for example, to protect employer trade secrets, or one that restricts only individuals’ managerial or ownership interests in a competing business.
If you believe your rights under the labor law have been violated, please contact a Levy Ratner attorney here.