In the first quarter of 2023, various National Labor Relations Board staff have determined most non-compete agreements are void as “unfair labor practices.” Such contracts, which can result in lost work opportunities, violate the National Labor Relations Act. Be clear the Act applies to union as well as non-union employees granting employees the right to engage in “concerted activity.” Concerted activity means where at least two employees (or one employee speaking on behalf of two or more employees) advocate for improved work conditions. Thus, disciplining or firing employees who exercise their rights under the Act is unlawful. Non-compete agreements—which are often overly broad in the length of time and/or geographic area—are deemed void unless it protects a legitimate and narrowly defined trade secret. Information that is generally known does not constitute a trade secret. Thus, seeking employment with a competitor to gain better working conditions, and discussing the same with other employees, is a protected activity under the Act. Likewise, overly broad contract provisions or policies that prohibit disclosing “confidential information” and/or making “derogatory” comments about the employer, typically binding all of its representatives, also will be deemed unlawful.

Employers should consider voiding or revising such provisions in prior contracts.

There are exceptions: Non-compete provisions for managers, owners and certain supervisors who may hold trade secret information remain lawful. Also, employees who engage in concerted activity which includes physical property damage are not protected under the Act. Comments that are “so disloyal, reckless or maliciously untrue” will remain enforceable as disparagement.