NLRB Recommends Banning Noncompete Agreements

Non-compete agreements are being closely reviewed by the National Relations Labor Board (NLRB). The NLRB has jurisdiction over all businesses that have employees in the U.S, whether union or non-union.

The NLRB has recently stated that non-compete agreements violate the federal law that governs union organizing and workers’ rights to collective bargain.

Act.

This decision falls in lockstep with other agencies, most notably the Federal Trade Commission (FTC), which will soon release a final rule based on its January statement to ban all - or most - noncompete agreements.

It should be noted that the NLRB decision does not create a binding rule for employers, but a complaint may be filed by an affected employee with the NLRB and a hearing will be scheduled by a local field staff. A decision by that office will be binding, using the guidance by the NLRB.

 A solution to this may be to substitute a noncompete for a Nondisclosure Agreement (NDA).  

Sigma6 HR Benefits strongly suggests that those who would like to continue the use of noncompete agreements or  noncompete clauses in an employment agreement, have your attorney review the agreement for updating to meet NLRB suggestions.

Also, should you decide to use an NDA, your attorney can draft one for your company’s unique business model.

For more detailed information on this subject and other personnel and employment issues, contact us 502 292-2980. 

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