Restrictive Covenants

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The National Labor Relations Board moved from theory to practice in this administration’s battle against restrictive covenants. Recently, the Regional Director of Region 9 of the National Labor Relations Board filed a consolidated complaint alleging that certain restrictive covenants contained in offer letters and policies in an employee handbook violated the National Labor Relations Act. This complaint is a logical…

Continue Reading We’ve Got a Test Case: The NLRB Files its First Complaint Challenging the Validity of Restrictive Covenants

On September 1, 2023, California Governor Gavin Newsom signed legislation that furthers the state’s protections for employee mobility and seeks to void out of state employee non-compete agreements. Specifically, the new law provides that any contract that is void under California law is unenforceable regardless of where and when the employee signed the contract.

Under existing California law, non-compete agreements…

Continue Reading New California Non-Compete Law Furthers the State’s Employee Mobility Protections and Seeks to Void Out of State Employee Non-Compete Agreements
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In Seyfarth’s third installment in the 2023 Trade Secrets Webinar Series providing valuable insights into navigating this evolving landscape, Seyfarth attorneys covered a range of topics, including the latest technology threats, the importance of communication and training, revisiting confidentiality policies, alternative trade secret protections, and updating restrictive covenant agreements. Here are the key takeaways from the Seyfarth webinar:

  1. Staying Informed
… Continue Reading Webinar Recap! Managing Trade Secrets in a Remote Work Environment
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On January 1, 2022, the latest amendments to the Illinois Freedom to Work Act (“Act”) became effective. As we previously described, that Act sets forth various requirements governing restrictive covenant agreements in Illinois. Among other things, the Act codified the so-called Fifield Rule by defining adequate consideration for enforcement of a restrictive covenant to be either two years of…

Continue Reading Questions Remain Regarding Adequate Consideration under Illinois’ Freedom to Work Act
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Confidentiality obligations and restrictive covenants are crucial tools employed by organizations to protect sensitive information, trade secrets, and competitive advantages. However, recent state law and regulatory developments and NLRB decisions…

Continue Reading Upcoming Webinar! NLRB and Restrictive Covenants: Trends in Employment Confidentiality
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The Nevada legislature passed new legislation recently that essentially bans all non-compete clauses in physician contracts while severely limiting the instances in which a hospital or psychiatric hospital may employ a physician as an employee, rather than as a contractor. Assembly Bill 11 was introduced in February 2023 and had passed both the Senate and Assembly by May. However, Nevada…

Continue Reading Nevada Seeks to Ban Non-Competes with Physicians
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Over last week, two seemingly unconnected events happened that impact restrictive covenant and labor law. First, the National Labor Relations Board’s General Counsel, Jennifer Abruzzo, issued a memorandum opining that certain non-compete agreements may violate the National Labor Relation Act by suppressing workers’ ability to engage in protected concerted activity. Second, the Supreme Court issued the Glacier Northwest, Inc. v. …

Continue Reading Did the NLRB Preempt Non-Compete Litigation?
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The FTC is not alone in taking aim at non-competes. Yesterday, the NLRB’s General Counsel Jennifer Abruzzo issued a memo to all regional directors, officers-in-charge, and resident officers at the NLRB stating that non-competes in employment agreements and severance agreements violate the National Labor Relations Act except in rare circumstances. Specifically, Ms. Abruzzo claims that such covenants interfere with workers’…

Continue Reading The NLRB Joins the Fray: Another Attack on Non-Competes
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The California legislature is considering new legislation that proposes, among other things, penalties for an employer’s use of restrictive covenants as well as for attorneys who assist with their enforcement.

Assembly Bill 747 was introduced in February 2023 and, if passed, would make the following changes:

  • The existing exception for restrictive covenants that are part of the sale of a
… Continue Reading California Weighs Formal Penalties for Attempts to Enforce Restrictive Covenants
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The Board sent shockwaves through employment law in its February 21, 2023, decision in McLaren Macomb, which held that simply offering a draft settlement agreement with broad confidentiality and non-disparagement provisions violated the National Labor Relations Act (“NLRA”). We previously blogged about the McLaren decision and encourage you to read that post for a summary of the decision.

McLaren left unanswered a host of critical questions and, in the month following the decision, employers have not received any further clarity from the Board regarding how this decision will play out in practice. But some clarity—welcome or unwelcome—is coming. At some point this week, General Counsel Jennifer Abruzzo plans to release a guidance memo that will elaborate on the Board’s position.…

Continue Reading NLRB to Release Memo Clarifying Impact of McLaren Macombs on Confidentiality and Non-Disparagement Restrictions