NLRB Eases Pressure on Noncompetes in Win for Employers

The National Labor Relations Board’s Division of Advice recently addressed whether employee noncompete and confidentiality provisions violated the National Labor Relations Act. The case it addressed involved former employees who agreed to six-month restrictions and later went to work for a competitor. The division recommended that the charges be dismissed. In doing so, it relied on General Counsel Crystal Carey’s position that “non-compete agreements do not as a general matter impact employees’ rights under Section 7.”

The memorandum reflects a clear change in enforcement priorities. Under the prior general counsel, the agency urged regions to view many noncompetes as unlawful restraints on employees’ protected concerted activity. The current memorandum takes a narrower view of the NLRA’s role in regulating noncompetes, placing greater emphasis on existing board law and the facts of the particular agreement.

The NLRB’s Prior Scrutiny of Noncompetes

In May 2023, then-General Counsel Abruzzo issued guidance asserting that noncompete provisions often interfere with Section 7 of the NLRA, which protects employees who act together regarding wages, benefits and workplace conditions. The NLRB identified several protected activities that, in Abruzzo’s view, could be burdened by noncompetes, including employees acting together to resign, seek better employment opportunities, recruit co-workers for competitive employment or obtain work for the purpose of supporting organizing activity.

The NLRB’s premise was practical as much as legal: if employees believe they cannot move freely to other jobs, they may be less willing to risk discipline, discharge or economic pressure when they join with co-workers to improve working conditions. In the NLRB’s public release, Abruzzo stated that noncompetes may chill Section 7 rights when employees could reasonably read them to “deny them the ability to quit or change jobs by cutting off their access to other employment opportunities.”

Abruzzo’s initiative was relatively short-lived. In February 2025, Acting General Counsel William B. Cowen withdrew multiple memoranda, including the noncompete guidance. Cowen explained the broader rescission in resource-allocation terms, stating, “if we attempt to accomplish everything, we risk accomplishing nothing.”

How the Recent Advice Memorandum Changes Course

The latest memorandum centered on Biotricity, Inc.’s effort to enforce post-employment restrictions against two former employees who joined a competing business. Their agreements included a six-month noncompete, confidentiality obligations and additional limits on post-employment conduct. Rather than presenting the issue in the abstract, the case gave the division a real-world enforcement dispute: an employer seeking to protect competitive interests, and former employees arguing that the agreement unlawfully restrained their rights under the NLRA.

The charges were filed in September 2023, shortly after then-General Counsel Abruzzo issued guidance asserting that noncompete provisions may interfere with Section 7 rights. But on May 5, 2026, with this guidance rescinded, the division recommended dismissal. The division also repeated the current general counsel’s view that “non-compete agreements do not as a general matter impact employees’ rights under Section 7.” With that framework in place, the division concluded that maintaining the noncompete provision did not amount to an unfair labor practice.

The confidentiality provision received a separate, context-specific analysis. The agreement swept broadly by referring to “all information not generally known to the public,” but the division considered that phrase alongside the agreement’s examples and business context. Read as a whole, the provision was treated as directed at competitive business information, not as a restriction on protected conversations among employees about workplace issues.

Where NLRA Risk May Remain

The memorandum does not give employers a free pass for every form of restrictive covenant. The division acknowledged that some language in the agreement — including portions of the non-solicitation, third-party inducement and non-disparagement restrictions — was “arguably unlawful.” It nevertheless recommended dismissal because those provisions had not been used against the charging parties.

That enforcement point is important. The memorandum suggests that current NLRB prosecutors are unlikely to bring a case merely because an employer maintains a noncompete. But other agreement terms may still raise NLRA concerns if employees could reasonably understand them to restrict conversations about pay, workplace concerns, employment terms or other protected concerted activity. Employers should evaluate not only the text of each restriction, but also how the employer applies it in practice.

What This Means for Employers

The Biotricity memorandum should be encouraging for employers, but it should not be read as the end of noncompete compliance review. Employers should consider the following practical steps:

• Review the full agreement, not just the noncompete. Confidentiality, non-disparagement, non-solicitation and no-recruit clauses can present different NLRA issues than a standalone noncompete.
• Draft with specificity. Tie confidentiality obligations to legitimate business information and avoid language that could be read to bar employees from discussing wages, hours or workplace issues.
• Keep state-law limits front and center. Even if the NLRA risk is reduced, state statutes and common-law rules may impose notice requirements, compensation thresholds, industry bans or other enforceability limits.
• Continue monitoring the board and general counsel. Advice memoranda are not board decisions, and future agency leadership may take a different approach.

The NLRB’s current position substantially narrows the prior enforcement theory aimed at noncompetes. At least for now, agency prosecutors appear less likely to treat noncompetes as inherently suspect under the NLRA simply because they restrict post-employment options. Employers should still proceed carefully. Restrictive covenants should be tailored to protect legitimate business interests and should not be written or enforced in a way that could interfere with employees’ protected rights.

Please contact Stephanie Poucher or any member of the Phelps Labor and Employment team with questions.