It was not long ago that the National Labor Relations Board’s (NLRB’s) former general counsel was treating noncompete covenants as a potential federal labor-law violation. That theory was ambitious: a noncompete could chill employees from quitting together; threatening to quit to improve conditions; or taking jobs with competitors as part of collective activity. That guidance generated plenty of anxiety for employers, even those operating in states that otherwise permit reasonable restrictive covenants.
Last week, the NLRB’s Division of Advice provided a useful corrective. In Biotricity, the Division advised that, under current law, an employer does not violate the National Labor Relations Act (NLRA) merely by maintaining a noncompete provision of the kind targeted by the former general counsel’s rescinded guidance. Put differently, the NLRB is no longer pursuing the theory that noncompetes are generally unlawful simply because they may limit employee mobility.
Employers should welcome the shift, but they should avoid turning it into a victory lap. Biotricity is an advice memorandum, not a binding board decision, and it does not make an overbroad noncompete enforceable under state law. California still hates them, other states continue to regulate them aggressively, and even traditionally employer-friendly jurisdictions often require careful limits on duration, geography, and scope. But for now, employers can breathe a little easier: merely having a noncompete is no longer likely to put a target on their back at the NLRB.
