NLRB General Counsel Doubles Down on Invalidating Noncompetes and “Stay-or-Pay” Agreements
Latest memo lays out additional remedies available to current and former employees
On October 7, 2024, the National Labor Relations Board’s General Counsel issued another memo targeting employee noncompete agreements and expanding the bullseye to include what the NLRB calls “stay-or-pay” agreements.
In May 2023 the NLRB’s General Counsel issued an memo taking the position that many non-compete agreements violate the National Labor Relations Act (NLRA). Her latest memo doubles down on this position and lays out the possible remedies available to both current and former employees. In addition, the directive targets so-called “stay-to-pay” agreements, such as training agreements, educational repayment agreements or sign-on bonuses, which the General Counsel believes “restrict employee mobility” and “increase employee fear of termination for engaging in activity” protected by the NLRA. The General Counsel is urging the NLRB “to find that any provision under which an employee must pay their employer if they separate from employment, whether voluntarily or involuntarily, within a certain timeframe, is presumptively unlawful.”
The General Counsel’s memo can be found HERE.
Employers are encouraged to consult with their employment and labor law counsel and to review their agreements that may include noncompetition or repayment terms to avoid becoming an NLRB target.
This article is provided for general information purposes only and should not be construed as legal advice. Those requiring legal advice are encouraged to consult with their attorney.