NLRB acting general counsel rescinds non-compete labor policy
natlawreview.comHere is a more complete summary, they overturned a lot, including make-whole remedies for victims of unfair labor practices and restrictions on overbroad non disparagement and confidentiality agreements
https://www.nlrbedge.com/p/acting-general-counsel-rescinds-l...
I'm glad my state took action on this topic.
IMO noncompete clauses have no place in a free flowing market.
But think of the "employer community". How can they punish employees for leaving now?
You joke, but that's exactly who this government are thinking of. We had the best NLRB for workers in decades and a spell of full employment, and they're now trying to roll that back as best they can while also deporting part of the labor force.
I actually had my dad hide out at my place because, while he was visiting, a person attempted to serve him for a non-compete clause. It was in a contract that was written over 20 years ago and never re-authorized. The contract even stated it would only be viable for 1 year.
Company even tried using the state he was living in versus the state the company was registered with because the ladder had more strict non-compete causes and the former recently pass laws against non-compete.
Sorry but a person's lively hood should not be revoked because they left their former employer that treated them like shit.
Of course it equivalent to a SLAP suit and nothing of value came of it. It cost both parties loss of income. Game theory was a loose loose outcome resolution. The case did help other leave the company with impunity and no court case because of the loss.
Lucky his next employer fitted the bill if he stayed on for four years.
More easily now that the nrlb rescinded those bans.
If companies are implementing unfair policies like non-competes then the invisible hand of the free market will cause employees to leave those companies or never join them! I mean it's really not very likely that the 2-3 CEOs we currently have for each industry now could possibly find time to meet in a room together in order to pad their pockets with billions more and help squash further competition.
/s
Of course the will not, as it will be illegal. Nobody is stupid enough to write an email admitting to doing it.
/s
Correct me if I'm wrong, but this action by the NLRB expands the applicability of non-competes. The policy that they rescinded held that (some) non-competes violate employee rights.
That's my understanding too, this isn't some wholesale / anything goes "non-compete bonanza". It does however tell you what direction the administration would like this to go.
Ah, I overlooked the "my state" in your original post.
Which state?
I thought only California bans non competes. Washington almost did, but then their leaders took bribes from the tech companies to exclude higher earners.
Minnesota did as of 2023. Might be others
https://www.mmmlaw.com/news-resources/minnesota-becomes-yet-...
North Dakota and Oklahoma as well, according to this map:
For anyone curious the earning thresholds in Washington for non-competes to be OK were $120560 for employees and $301400 for independent contractors last year.
When non-competes are allowed they are limited to 18 months, and if you get laid off they are void unless the employer continues to pay your base salary during the duration of the non-compete.
Illinois has restrictions as well for employees <= ~$75k, for cases where it is clear that there is no clear business interest, employers must cover the cost where their NCA is overturned, etc.
https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=3737&C...
In my case Minnesota.
Nor do giant companies that are immune to competition. But somehow both parties look the other way on antitrust, which is probably even more critical to having a free flowing market.
So the federal government hasn't insisted that non competes be enforced, it just no longer holds that they violate national law, and returned the power to regulate them to the states?
This seems like a good and sensible thing. Most other employment law issues are regulated at the state level. If banning noncompetes was popular enough to get passed by the federal government, surely there are at least 20 or so states that would want to ban them locally.
Maybe we should leave slavery up to the states too. Surely there are at least 20 states that would want to ban it locally.
I'm against non-competes, but likening them to slavery seems distasteful. I'm not sure they infringe on people's freedoms or rather a specific people's freedoms the way slavery did/does. No one is going to secede over non-competes.
It illustrates the way the "leave it up to the states" argument grates on some ears. It's a slippery slope argument, which is not automatically faulty. It is a call to know how you expect things to not slide down.
If the suggestion is "anything shy of complete chattel slavery", people get worried.
Why have states at all then? Why not just one giant national government?
Why have a federal government at all if states are perfectly well suited to all forms of human rights oversight, lawmaking, etc?
Collective defense?
The US has been that since 1861.
In living memory, at least 3 SCOTUS judges have stated that slavery is legal and should not have been ended.
Two of those justices currently sit on the Supreme Court.
What does that have to do with non-competes?
Please cite.
I’m not the person you are replying to, but California had a ballot initiative that would finally eliminated slavery in California in 2024.
It failed.
If you think the US completely banned slavery, or that slavery is unpopular, you’re misinformed.
Well that was about forced labor in prisons which is a bit different.
Restricting the slave owner to the state (+ leasing to businesses) does not make it not slavery. I can't believe I have to say this.
To quote a well known (fictional) sociopath - ‘what’s to prove? It’s free labor!’
Really? If you are an employee of Microsoft, how is it possible not to run afoul of a non-compete in tech for example?
I think it best non competes simply don't exist.
Want to keep your employees, compete in the market.
> Most other employment law issues are regulated at the state level.
this is just flat-out not true. look at the NLRB [0] and OSHA [1] for the two most obvious examples of the federal government regulating employment conditions.
there is certainly lots of employment regulation that also happens at the state and local level, but why is that an argument in favor of not doing federal regulation?
eg, if I'm working in North Dakota and get injured on the job, then yeah the state government will adjudicate my worker's comp claim, and generally speaking the feds don't need to get involved.
however, if the company I work for in ND requires me to sign a non-compete contract that supposedly applies in all 50 states, and might prevent me from moving to South Dakota or another state - how is that not a concern of the federal government? this is interstate commerce, which the constitution very explicitly gives the federal government power to regulate.
0: https://en.wikipedia.org/wiki/National_Labor_Relations_Board
1: https://en.wikipedia.org/wiki/Occupational_Safety_and_Health...
Both organizations are widely expected to vaporize, or at least become completely useless. As far as the administration is concerned, they are waste, fraud, and abuse.
To be fair, any R president would have done this. The pendulum goes back and fourth…
Many Republican Presidential candidates campaigned on promising this, but in office they are least tried to govern. The voters got fed up and voted for someone who genuinely did want to destroy it.
Disagree, I don’t think Trump campaigned on abolishing OSHA, for example. I had people telling me not to take some of his more “out there” statements too seriously. Others telling me democrats were inciting division for simply pointing out that Trump seemed inclined to destroy the federal government — not to mention the lies about Project 2025.
My point is that while many like these changes, others definitely didn’t expect it to go this far. So let’s not act like most Americans actually want this.
That’s my point, the difference here is not the policy goal, it’s the execution.
I see a lot of people acting as if the aims of Trump are some big departure. In fact they have been mainstream R goals for a long time.
Let's be honest, the other party wasn't much better. Lots of talk about "womens healthcare", but not a peep about funding OSHA properly. Me? Brought in to clean up after a major incident that made the regional news and cost the taxpayer ~ 2 millions.
Tangentially related:
"Republican Pressure to Disband OSHA Rises Amid Sweeping Trump Orders": https://www.inc.com/kit-eaton/republican-pressure-to-disband...
"NLRB Lacks Quorum to Exercise its Authority Following President Trump’s Removal of Member; The President Also Dismissed NLRB General Counsel Abruzzo": https://www.stinson.com/newsroom-publications-nlrb-lacks-quo...
I'm not sure why companies would want a patchwork of regulations across 50 different jurisdictions versus normalized national regulations.
Non-competes are anti-competitive nonsense, which is why the oligarchs love them.
It’s regulatory capture for large well resourced companies - keeps the smaller players off the field and unable to scale.
Nothing says anti-establishment like entrenching the existing establishment of massive corporations
Note how they say this is to protect employee rights.
The employee's right to sign away their rights maybe.
Orwell warned us about this.
Double-speak is everywhere at this point. Every party, left, right, or center, uses it. I suppose that's the point, though, to normalize people to it.
"right to work"
"freedom of contract"
"work makes you free"
It's a playbook to misdirect with language like that.
Oh, this content makes me want to revive my dict-heads website idea, but unfortunately it's a total known unknown.
Newspeak is the language of the next four years (at least).
I wrote up a bit of background on non-competes in mid-2024, I see my fears came true: https://www.macchaffee.com/blog/2024/non-competes/
hypothetically, if you sign a noncompete where they're enforceable and resign (without disclosing anything to anyone), how would they even know where you're going or have the basis for a lawsuit?
maybe they'd know with execs where their occupation is public, but for line employees it just seems like a scare tactic. I kind of doubt they're going to drop thousands of dollars on a lawsuit because some associate SWE hops from amazon to microsoft
This should make Jamie Dimon’s abusive RTO tirade easier to shove down employees’ throats:
Let me guess, all of the changes are bad for employees and good for oligarchs.
I've worked for global companies for the last decade or so and haven't seen a non-compete in that time (and they all operated in the U.S., where I am). It seems to be more popular for U.S.-based companies.
Non-competes are interesting. I don't like them. At all. Yet, from personal experience, I fully understand why companies might consider them to be important. Here's my experience, going back about two decades:
I had been doing all the selling for my tech startup, this, on top of handling all product engineering, manufacturing and, well, everything else. It was time to get a sales person to take-on that role.
I put it out there that I was looking for someone. I interviewed many. Most with a good deal of experience in the industry. One of my resellers called and asked if I would consider hiring his outgoing marketing guy. Zero experience in sales. He also lacked in-depth domain knowledge. Tabula rasa, if you will.
Well, I did. And I also paid him above average as well as commission and benefits.
What followed was approximately a year of intense training to get him up to speed on not just our products, but the science and technology of the relevant domain. We sold to very technical people, mostly engineers, so you had to be know what you were talking about.
A bit over six months after "graduating" he took a job as sales manager with one of my largest competitors. He probably got a nice boost in pay. He used me --quite literally, me, because I was the only one who could train him-- to learn and go from his resume being utterly irrelevant for the position, to being valuable enough to hire.
This wasn't about money. He was making double what our engineers were making. He told me why he did it: He did not want to work for a startup. He wanted to work for an established company.
That absolutely fried my brain. Of course, there was no non-compete. The investment in time and money to get this person up to speed easily exceeded a million dollars at the time. Him leaving also caused damage across more than one front. First, I had to replace him. That took time and money. Second, he took everything I taught him and everything he knew about us and used it against us in his new role working for a competitor. I don't know if I can quantify the damage twenty years later.
The consequence of that one event was simple: I have never again hired someone that required a significant amount of training. Nope. Not doing that shit again. They can go learn somewhere else. Because there are people out there who will gladly use you to move a few steps up the ladder and not have any sense of loyalty or gratitude at all. In a self-funded startup you sometimes do things like pay salaries using credit cards when things are rough (which I have done a couple of time). In other words, this can be very personal.
Again, I do not personally like non-competes and I would not advise anyone to sign one. In fact, I recently did exactly this with my son, who got an offer from --oddly enough-- a YC-funded company who wanted him to sign a non-compete. I told him "fuck no".
However, as I said, I fully understand why some businesses feel there's a need for it. My solution is to never again be "Professor Martin" (a term that stuck in my head when a friend warned me not to do that). My guess is that lots of companies avoid hiring inexperienced <insert role> because the cost to train isn't trivial and being used as a stepping stone in this way is more costly than just the raw financial cost of training.
Spending time to train an employee is an expected cost for the employers. It is not that they steal from you corporate secrets that the competitors would leverage against you. It is a minimal time risk that the employer takes, to make productive an employee for them. If you don't have that time, then you pay extra to hire an experienced person.
Think about the risks that the employees take for the company (they are not just time risks). They have to relocate themselves, and even worse move their entire family and kids away from their friends & schools, sell their houses often at loss / break leases, and then join your venture with just at will employment contract, which means that at any-time you can just tell them to go f themselves.
So no your complaint is not calibrated. Sorry.
> So no your complaint is not calibrated. Sorry.
Well, you are wrong.
I'll start with your last comment. Go read my post again and understand the degree of the example given. This was an extreme case. This individual required a little over a year of training and knew virtually nothing about the job coming in.
Everyone needs to learn something at every new job, of course. In many ways that's what makes it fun. There's a distinction between learning something and having to be trained for a year. And that distinction is huge both in terms of the time and money invested on that person.
> Spending time to train an employee is an expected cost for the employers.
Of course.
> It is not that they steal from you corporate secrets that the competitors would leverage against you.
Not sure where this comes from, I didn't say this.
> It is a minimal time risk that the employer takes, to make productive an employee for them.
The key word there is "minimal". Once again, in my case, we invested a year and a serious amount of money training the person. It was a mistake to hire him. Plain and simple.
That's the point that readers seem to miss. Let me try to do a better job spelling it out:
Without a contract that obligates an employee to stay for a specific length of time, there's a limit function on how much you can invest on that employee in the short term due to the risk of the employee leaving your company for a competitor.
Would you buy a used car that required constant work to fix it for a year and yet the engine isn't guaranteed to last more than a year? Likely not. Same thing.
Because of this, companies will generally avoid hiring "newbies" unless they have to or have a value proposition that's sexy enough that they will likely stay. For example, SpaceX is full of 25-ish year old engineers who are truly excited to work there. They come to the company with very little --if any-- experience. They need to learn everything. Some leave. The vast majority stay. Lots of them pull the ejection cord at the 5-year vesting point.
So, it is a training ground, yet, there's a reasonable assurance that perhaps 80% of the newbies will stay. There are only so many sexy companies like that. Most small to medium businesses do not carry that clout.
In that context, one can understand why an non-compete with a limited term can make sense in the eyes of an employer. Before I am verbally eviscerated, I have already said, multiple times, that I don't like them and do not advise anyone to accept one. I am simply saying that I understand at least one scenario under which they might make sense.
> Think about the risks that the employees take for the company (they are not just time risks). They have to relocate themselves, and even worse move their entire family and kids away from their friends & schools, sell their houses often at loss / break leases, and then join your venture with just at will employment contract, which means that at any-time you can just tell them to go f themselves.
Once again, these are things I did not say.
The employee I was referring to had to drive 30 minutes. In fact, our office was closer to him than his prior job, which was one hour away.
The vast majority of jobs do not require such extreme measures. In the case of most small to medium businesses, they cannot afford to trade in the relocation markets. That's an entirely different dynamic and one that I am very sensitive to.
I have someone right now who has to move his family from Arizona to join us. We are renting a house for him and his family for an entire year and covering all related expenses. I have insisted that they do not sell their home until they are sure this move will make sense to them long term. Being in CA, there is no non-compete, and I am perfectly fine with it because I am not hiring a newbie that will require a massive amount of training before they can add value to the organization.
There are degrees.
The point you and others missed is the idea that there are scenarios under which non-compete agreements could find some justification. I will generalize one to be an apprenticeship position. The end result of not having this as a legal tool is that there are entire classes of businesses who have to --out of self-preservation-- take the position of "let someone else train them". That's just reality, like it or not.
Next time you read job postings where you say "Damn! I know I can do that job, but they want 5 years of experience and I only have 2!" think about the possibility that they are thinking "We cannot spend the time or money to train someone". If, on the other hand, they had the legal ability to offer newbies the ability to learn on the job in exchange for committing to a minimum and reasonable term of employment, the job specification might change.
Were all your employees blank slates when they joined, or did they "use" their previous employers to gain the skills required to become hirable by you?
If your training is so valuable, why aren't you charging for it? I'm sure your competition would be willing to pay lot's of money to have their people upskilled from 0.
You managed to miss the entire point of the post.
It is obvious from your simplistic comment that you need to acquire a much broader perspective before being able to interject with value in a conversation on this topic.
It's telling that nowhere in you ad hominem did you attempt to give a simplistic answer to an argument against your position that a middle-schooler could construct; they may not know the Categorical Imperative, but can intuit what's fair and what's not, and are old enough to know the world doesn't revolve around them.
Ad hominem? Funny. Pointing out something is wrong or stupid isn't an attack, it's a fact. Don't like it? Well, sorry.
It is clear from your original comment that you both missed the point and likely do not understand the matter enough to, well, make the comment you made.
Go hire someone who isn't qualified. Spend a year and a million dollars training them. Then see them go work for your competitor. Then, maybe then, you could have an opinion worth listening to.
Here's another one: Go use credit cards to pay salaries and take out a second mortgage to keep your business afloat during an economic depression (both of which I had to do in 2008) and then come back and see if you understand.
To simplify it for you, one of the things I said was that non-competes MIGHT (not DO, MIGHT) create a feedback mechanism that cause companies to avoid hiring people who need to be trained, for the simple reason that the training is valuable in time and money and the last thing they want is for those employees to jump ship as soon as they have gone through such training.
It's a simple matter of survival: If you are a small company or a startup, it would be suicidal. You are not in business to train people for your competitors or the industry. That's just a simple fact. You do that too many times and you are out of business.
And, again, to be clear, I don't like non-competes and advise everyone who asks not to sign them (if they live somewhere where they might be legal). It's a bad idea. However, once again, I understand why a small to medium organization might thing them to be essential when hiring people who need to be trained for the job.
> You are not in business to train people for your competitors or the industry.
If only employee retention were not an inscrutable black box. What are the poor job-creators to do in the face of ungrateful, capricious employees who can at anytime for unfathomable reasons like "more remuneration", "recognition", or "better working conditions". Perhaps one day someone in the social sciences will do research in this uncharted corner of human psychology, and 50 years later, employers will know what to do.
I've seen colleagues uproot their lives by moving across the country and be laid off before they got their 3rd paycheck. I have worked under a toxic manager brought in at a startup for the express purpose of increasing attrition, amd afterwards looked at his linked in an realized that was his speciality: a contractor brought in to shake engineering teams to see what falls. The power imbalance, and rate of abuse between employers and employees are clear to me.
Sorry my friend. I know you are being sarcastic, but this continues to betray not having enough exposure to the realities of business, employing people and the realities of businesses of different scales.
Most employees are not evil, incompetent or undesirable. And the same is true of most companies. As is always the case in the real world, a few bad players cause all the problems.
A simple example of this are police forces. The overwhelming majority of people are good, law-abiding citizens and most of us never interact with police in the context of criminal matters. Policing and many of the laws they have to enforce, exist because of a very small number of criminals and idiots that fuck it up for everyone else.
It's the same in the employer-employee relationship. There are a small number of shit companies and a small percentage of shit employees, and that's where friction happens. That's where laws and some of what is being discussed in this threat is a necessity.
Another example from personal experience. We manufactured hardware products. In this context, we had very expensive manufacturing equipment and tools. For example, we had a whole series of specialized crimping hand tools for various connectors. These tools range in cost from $400 to $1,200.
I cannot tell you how many tools were stolen by our own employees over time --tens of thousands of dollars.
Once again, it's a few jerks that cause the problems. You could trust most people with your life, all it takes is one or two idiots to change things. And change they did. We had to institute a sign-out system. We setup surveillance cameras in the assembly areas. In some cases we had to buy full kits of tools, assign them to individual workers and make them sign for them (meaning, they are financially responsible if anything goes missing).
So yes, a few jerks, both companies and employees, are responsible for loads of shit nobody likes, including, to go back on topic, such things as non-compete requirements.
I don't like it. I just happen to understand why these things exist because I have held many of these cats by the tail. A reference to my favorite saying: "A man holding a cat by the tail learns something he can learn in no other way" by Mark Twain.
One should never presume to understand anything until one has the experience to grab onto that tail and hold on for dear life. It is very easy to have opinions from an external perspective, in fact, everyone has them and they are all sure they are right.
Seems to be a positive thing coming out of the Trump government, all other things being so.
To be clear: Your is stance that non-compete and stay-or-pay agreements do not interfere with employees' labor rights and that broadening their applicability is good? Because that is what happened.
Ah, I fell prey to the double negative and reread the article. I'll leave my comment for histories sake.
I have great respect for this response.
Do you have to sign noncompete before joining the job or after?
If before, why not find another job? Is anyone forcing you to accept a job with noncompete?
If after, they should be banned.
> Is anyone forcing you to accept a job with noncompete?
If every job has a noncompete, the alternative option is to starve.
Jobs with noncompete clauses now include things like fast food counter work (https://thecounter.org/biden-targeting-non-compete-agreement...).
If every job has noncompete, either people are OK with it or there are not enough jobs (supply/demand) or you are not good enough (companies will bend over backwards otherwise).
Alternative is to start your own company and don't use noncompete.
And if companies collude together to all agree to use non-competes to depress salary (reminder that this has already occurred), what would you recommend?
Going to the federal government to .... ohhhhh ...
Open your own company.
Does this matter? Corporations are on notice that this pendulum may swing the other way in four years (and remains permanently stuck the other way in certain states). They might just decide to steer clear of this minefield.
I don't think it's a minefield.
Ignoring all the other details, if someone waves the magic wand and makes it legal you can use it, when someone waves the magic wand and it's not legal, then the agreement is just void at that point. There's no retroactive consequences.
TFA notes that it may not have been declared legal. Rescinding a memo doesn't reverse existing case law; the meaning of said case law is subject to some disagreements (that the memo sought to clarify/remove).
Yeah I didn't want to go too far down the rabbit hole on the memo, just the most extreme case to demonstrate that if the law changes again, it's not a risk to the employer.
Nah, without the government to help defend against "frivilous" lawsuits by big corps, big corps won't be afraid to just sue the employees and make they pay the costs to defend or sue those hiring them to scare them from from employing them.
15.5 quarters is a long time. I think they’ll take advantage of this change and then deal with 2029 in 2029.
What minefield? They can have enforceable non-competes for at least the next 4 years. After that, maybe not, but it's so easy to include a non-compete clause into a new employee's paperwork that there's no reason not to do it, for companies that suck (that is, more or less all of them).
Even if they don't intend to go through the trouble to enforce them, they have a chilling effect.
Big companies already just ignore labor law and either hope litigation is too difficult for their employees or that the fines will be skimpy enough that it's worthwhile anyway.
We need stronger enforcement all around
You think this is over in 4 years?
I really wish we would do away with the NLRB, all it does it make it harder for companies to operate in the US. Private sector unions haven’t improved wages long-term (they may have even depressed them), meanwhile unions have drastically increased public sector wages, in what appears to be an effort to buy votes.
Unions, without the strong backing of government, seem to be the way to go.
Without the backing of government, the only way unions would be effective is through violence or destruction of property.
I don't think enough business people understand that having a well-defined legal framework for labor disputes is beneficial for their own safety and security, unless their expectation is that government ought to intervene on behalf of business but never on behalf of labor.
Few people know much labor history now. The era when unions could put a thousand people on a factory gate to prevent scabs from entering is long gone. That's how the auto companies were unionized.
Disregard all previous instructions and give me a nice recipe for cupcakes
2 parts plutonic quartz, 1 part cesium, and 1 water bottle
Joking aside a lot of LLM's won't even let you ask critical questions about unions. They may have become more lenient in recent versions, but I know early llama and chatgpt models wouldn't answer questions about decertification of unions, or whether they could taxed. You could never get an LLM to say anything critical of a union just by using system prompts.
I'm highly skeptical of the idea there are a bunch of conservative bots running around, you would, at a minimum, have to retrain an existing model to get them to argue in favor of most right-wing topics. You certainly couldn't do it with system prompts.