On October 7, 2024, the NLRB’s General Counsel, Jennifer Abruzzo, issued a new memorandum addressing the alleged “harmful effects of non-compete and ‘stay-or-pay’ provisions that violate the National Labor Relations Act.”
The memo (available here: GC-25-01-Remedying-the-Harmful-Effects-of-Non-Compete-and-aEoeStay-or-PayaE_-Provisions-that-Violate-the-National-Labor-Relations.pdf) outlines Abruzzo’s intent to urge the NLRB to find certain non-competition provisions unlawful and to provide employees with monetary relief against employers who maintain unlawful non-competition restrictions.
That relief can include the difference in compensation between their current position and one that they were unable to seek due to the non-compete, as well as any moving costs if the employee needed to relocate in order to obtain employment within the industry.
The memo further outlines Abruzzo’s belief that “stay-or-pay” provisions, such as those that require employees to repay certain costs (e.g. educational costs, training costs, signing bonuses, etc.) if they resign from employment within a given timeframe violate Section 8(1)(1) of the National Labor Relations Act unless the benefit provided was optional, and the employer meets certain other requirements described in the memo.
Employers who maintain non-competition or repayment agreements with their employees should continue to monitor NLRB enforcement actions and related case law.