NLRB Signals a More Employer-Favorable Approach to Noncompete Agreements

The National Labor Relations (“NLRB” or “Board”) Division of Advice recently issued guidance indicating that the agency’s current General Counsel does not view noncompete agreements as generally interfering with employees’ rights under the National Labor Relations Act (“NLRA”). Although the guidance does not eliminate the numerous state-law restrictions applicable to noncompete agreements, it marks a significant departure from the position taken by the NLRB’s prior General Counsel.

A Shift from the NLRB’s Prior Position

In May 2023, former NLRB General Counsel Jennifer Abruzzo issued Memorandum GC 23-08, taking the position that the proffer, maintenance, and enforcement of overbroad noncompete agreements generally violate the NLRA. According to the memorandum, noncompetes could discourage employees from exercising their rights under Section 7 of the NLRA, including by limiting employees’ ability to seek employment with competitors, collectively threaten to resign, or solicit coworkers to work elsewhere.

In February 2025, then-Acting General Counsel William Cowen rescinded GC 23-08, along with a related memorandum addressing remedies for allegedly unlawful noncompete and “stay-or-pay” provisions. The newly released advice memorandum provides additional insight into how the NLRB, now under General Counsel Crystal Carey, will evaluate noncompete agreements moving forward.

The Biotricity Advice Memorandum

The memorandum arose from unfair labor practice charges filed by two former employees of Biotricity, Inc., a medical technology company. The employees had signed agreements prohibiting them, for six months following termination, from working for Biotricity’s competitors or using their knowledge of the company’s confidential information. After leaving Biotricity and working for a competitor, the employees challenged the agreement and the company’s related lawsuit and arbitration proceeding.

The Division of Advice recommended dismissing the charges. It explained that, under current law, an employer does not violate Section 8(a)(1) of the NLRA merely by maintaining a noncompete provision of the type previously targeted by GC 23-08. The memorandum further stated that the current General Counsel does not view noncompete agreements as generally affecting employees’ Section 7 rights.

The Division of Advice also concluded that the agreement’s confidentiality provision was lawful. Although the provision broadly covered information not generally known to the public, the provision appeared within the noncompete agreement and specifically identified business-related information, including payroll, personnel, and employee information. Viewed in context, the Division concluded that employees would reasonably understand the provision as restricting the disclosure of confidential information to competitors–not as prohibiting protected communications with coworkers concerning workplace issues.

Notably, the Division identified portions of the agreement’s nonsolicitation, third-party inducement, and nondisparagement provisions as “arguably unlawful.” It nevertheless declined to pursue those allegations because the provisions had not been enforced against the employees and pursuing a complaint would not further the purposes of the NLRA under the circumstances.

The Division also found that Biotricity’s lawsuit and related arbitration did not violate the NLRA. There was no evidence that the proceedings were initiated in retaliation for protected concerted activity, and enforcement of the noncompete did not seek an unlawful objective under current Board law.

Additional Guidance for Separation Agreements

A second advice memorandum involving BAYADA Home Health Care similarly recommended dismissing allegations challenging a post-employment nonsolicitation provision and cooperation clause contained in a separation agreement. The nonsolicitation provision prohibited former employees from encouraging the company’s employees, clients, or business partners to leave or become affiliated with a competitor. The Division concluded that the provision was not facially overbroad because it applied only after the employment relationship had ended. As a result, it did not restrict employees from assisting one another during employment in seeking improved job security, wages, or benefits.

The Division also approved a provision requiring former employees to cooperate with company investigations and legal matters. It reasoned that the clause applied after separation and would reasonably be understood as requiring participation in pretrial activities, such as providing information or attending meetings, rather than compelling testimony against another employee.

What This Means for Employers

These memoranda provide welcome guidance for employers using noncompete and other post-employment restrictions. They signal that the current General Counsel is unlikely to pursue an unfair labor practice charge based solely on an employer’s maintenance of a conventional noncompete agreement.

Employers should not, however, interpret the guidance as blanket approval of all restrictive covenants. In particular:

• The memoranda reflect the General Counsel’s current enforcement position and do not constitute binding Board precedent.
• Nonsolicitation, nondisparagement, confidentiality, and similar provisions may still violate the NLRA if they could reasonably be read to restrict protected communications or other concerted activity.
• Enforcement may still create NLRA exposure when undertaken in retaliation for an employee’s protected activity.
• Noncompete agreements remain subject to applicable state laws, including state-specific bans, compensation thresholds, notice requirements, duration limits, and restrictions covering particular industries or categories of employees.

Key Takeaway

Employers should review their restrictive covenant and separation agreements to ensure that each provision is appropriately tailored, clearly identifies the interests being protected, and does not unnecessarily restrict employees’ ability to communicate or act together regarding workplace conditions. Employers should also evaluate the factual circumstances before pursuing litigation or arbitration to enforce a restriction.

Honigman will continue monitoring developments regarding the NLRB’s treatment of noncompete and other post-employment restrictions. For assistance, please contact one of Honigman’s Labor and Employment attorneys here.