Upon President Trump’s reelection and his immediate termination of not only former General Counsel Jennifer Abruzzo of the National Labor Relations Board (“NLRB”) but also Board Member Gywnne Wilcox, it was apparent that changes would soon be coming to the agency. One of the most significant early shifts occurred on February 14, 2025, when then-acting General Counsel of the National Labor Relations Board William Cowen rescinded several memoranda Abruzzo had previously issued.
One of these, Memorandum GC 23-08, was issued on May 30, 2023, and stated that “[e]xcept in limited circumstances,” the “proffer, maintenance, and enforcement” of non-compete agreements violates the National Labor Relations Act (the “Act”). See NLRB, Office of the General Counsel, Non-Compete Agreements that Violate the National Labor Relations Act, Memorandum GC 23-08, at p. 1 (May 30, 2023) (rescinded Feb. 24, 2025).
Another rescinded memorandum, Memorandum GC 25-01, was issued on October 7, 2024, and built on the first by making recommendations for “remedying the harmful effects of” not only noncompete agreements, but also “stay-or-pay” provisions such as training repayment agreement provisions (also known as “TRAPs”), educational repayment contracts, quit fees, damages clauses, and even sign-on bonuses tied to specific stay periods. See NLRB, Office of the General Counsel, Remedying the Harmful Effects of Non-Compete and “Stay-or-Pay” Provisions that Violate the National Labor Relations Act, Memorandum GC 25-01 (Oct. 7, 2024) (rescinded Feb. 14, 2025).
Continue Reading Cementing Directional Shift: NLRB Advice Memorandum Confirms Lawfulness of Non-Competes and Raises Questions About Separation Agreements
