Employee Survival Guide® - When the Earth Shifted: The Banning of Non-Competition Agreements

Starting point is 00:00:00 Hey, it's Mark here and welcome to the next edition of the Employee Survival Guide where I tell you, as always, what your employer does definitely not want you to know about and a lot more. Hey, welcome back. This is Mark and the next edition of the Employee Survival Guide for you. Today, talking about a continuing subject matter related to non-competes. The NLRB, which is the National Labor Relations Board, ruled in May 30, 2023, that non-competition agreements are illegal nationwide. Illegal for all employees. Imagine that.

Starting point is 00:00:48 Well, here's the gist. The National Labor Relations Board Chief Counsel issued a legal opinion on that date, May 30, 2023, banning non-compete agreements for all employees with few limited exceptions. All employees must take notice and read the press release below, and I'll include it into the links in this podcast, and the link to the legal memorandum issued by the NLRB General Counsel, Jennifer Abruzzo. If you are currently under threat of enforcement of your non-competition agreement, this is your immediate answer. It's legally unenforceable. The NLRB General Counsel legal opinion has the force of law for the following reasons. First, courts give administrative

Starting point is 00:01:35 deference to federal agencies because the subject matter here, the union and collective action and non-competition agreements, falls within the specialized purview of the federal agency, the NLRB. Second, as the legal opinion states, the General Counsel is regarding the NLRB accept cases from employees just like you, whereby non-competition agreements are used by employers to interfere with employee rights by attempting to use and enforce non-competition agreements on their current and former employees. So they're inviting you as employees when you have these situations to notify them. So nlrb.gov, go there, make a complaint, save a non-compete agreement, and see what they do about

Starting point is 00:02:24 it. this is all brand new territory oh and by the way send a copy of that email to your employer they'll be scared shitless i'm sure for all employees this is a big deal employers who seek to enforce non-competition agreement should be told by current and former employees that any non-competition agreement is legally unenforceable because the agreement violates the National Labor Relations Act. It's not a small task. That's a huge, big statement that the NLRB has made. For now, a copy of the General Counsel's memo, I'll put links in the podcast so you can see it,

Starting point is 00:03:01 and hand it to your employer or former employer when they threaten you to enforce their sham non-competition agreement. Like I said before, send a message via email and attach a copy of the memo. Then wait and see. And see if the employer sends you a cease and desist letter. It's highly unlikely that they will. Cease and desist letters are usually how they threaten you to make you comply with their nonsense agreement they generally don't go anything further beyond that in terms of if they don't file lawsuits because it takes money to do that the general counsel's memo and the recent ftc proposed ruled to ban non-competition agreements under the federal antitrust laws is a pivotal moment in history for all employees. According to the memo, it is now the law of the land, or at least the current threat to employer

Starting point is 00:03:53 enforcement of these one-sided non-competition agreements. Now, I've included, and I'll go through the press release because I want you to hear exactly what they're saying at the agency level. The NLRB press release stated the following, NLRB General Counsel Jennifer Abruzzo sent a memo to all regional directors, officers in charge, and resident officers setting forth her view that the proffer, maintenance, and enforcement non-competition provisions and employment contracts and severance agreements violate the National Labor Relations Act, except in limited circumstances. There you go. That's what she said.

Starting point is 00:04:32 The memo explains that overbroad non-competition agreements are unlawful because they chill employees from exercising their rights under Section 7 of the National Labor Relations Act, which protects employees' rights to take collective action to improve their working conditions. She goes on to say, specifically, these agreements interfere with employees' ability to, one, concertedly threaten to resign to secure better working conditions. Number one, to concertedly threaten, meaning together with other employees, to resign to secure better working conditions with whom? Another competitor. Two, she says, carry out concerted threats to resign and otherwise concertedly resign to secure improved working conditions, again, with other employees. Three, concertedly seek or accept employment with a local competitor to obtain better working conditions.

Starting point is 00:05:29 Sounds like number one, but she nonetheless says the same thing again. Four, solicit their coworkers to go to work for a local competitor as part of a broader course of protected concerted activity. I like that one. That should piss some employers off. activity. I like that one. That should piss some employers off. Five, seek employment, at least in part, to specifically engage in protected activity, including union organizing with other workers at an employer's workplace. Do you get the gist of this? She goes on to say non-compete provisions reasonably tend to chill employees in the exercise of Section 7 rights when the provisions could reasonably be construed by employees to

Starting point is 00:06:05 deny them the ability to quit or change jobs by cutting off their access to other employment opportunities that they are qualified for based on their experience, aptitudes, and preferences as to the type and location of work. This denial of the access of employment opportunities interferes with workers engaging in Section 7 activity in a number of ways. For example, workers know that they will have greater difficulty replacing their lost income if they are discharged for exercising their statutory rights to organize and act together to improve working conditions. Their bargaining power is undermined in the context of lockouts, strikes, and other labor disputes. And their social ties and solidarity, leading to improvements in working conditions at workplaces, are lost as they scatter to the four winds. agreements could be lawful if the provisions clearly restrict only individuals' managerial and ownership interests in a competing business or true independent contractor relationships.

Starting point is 00:07:13 Moreover, there may be circumstances in which a narrowly tailored non-compete agreement infringement on employees' rights may be justified for special circumstances. That's the press release. A big wow, okay? That's a huge deal if you didn't know what this issue was. If you have a non-compete, you know exactly what I'm talking about. Now you have a new angle of attack of dealing with this issue. The NLRA General Counsel's memo referenced in a footnote

Starting point is 00:07:42 the 13th Amendment to the United States Constitution, indicating the severity of the public policy issue non-competition agreements present. Amendment was not merely to end slavery, but to maintain a system of completely free and voluntary labor throughout the United States, end quote. That's from Pollock v. Williams, 1944, U.S. Supreme Court. In summary, what is moving the ball here on the final eradication of non-competition agreements nationwide is the billions of dollars lost on wages the result from employers forcing non-competition agreements on employees and the anti-union employer sentiment it also appears that the nlrb has a very real fear about current and future violations of the 13th amendment caused by entrapped and involuntary labor. Employees have never benefited from these one-sided employment agreements, and the courts were

Starting point is 00:08:51 never the legislative body or administrative agency to properly enforce public policy on this scale. In fact, in my experience, courts are extremely reluctant to enforce non-competition agreements against any employee, especially after the global pandemic we just came out of. The NLRB has finally set all employees free. It's a big goddamn deal, folks. And if you don't read up on this and follow it to protect yourself, this is going to your pocketbook, your money, your bank account. If you don't believe me,

Starting point is 00:09:25 just don't do anything and let the employer enforce it against you. And you're sitting on the bench waiting to find your next job because you can't do the very job that you've been spending your entire career doing because you had a non-compete that you didn't actually negotiate. And you got to hire me to get you out of it. It's a big deal. You take this little memo, you send it to your employer and saying, you know what? I don't think so, Mr. Employer. I'm going to report this to the NLRB. They're asking me to do that. The general counsel is asking me as an employee to do that. Mr. Employer, release me from the agreement or else I will do that. You don't need a lawyer to do that.

Starting point is 00:10:07 Just do it yourself. It's all there for you. I've given you information in this podcast. I'll put it in the show notes. I also just put a blog post out on it in case you need to go there too. It's the same damn information. Heed the warning. Heed the law.

Starting point is 00:10:27 You have your answer that you always wanted. I couldn't be happier for you all. And when the Federal Trade Commission finally gets around to it after all the lobbyists on K Street mess around with them and try to convince them not to do it, and they pass a rule banning non-competes from the antitrust level, then we'll have to wait till next year, I'm told. Well, that's going to roll into a political cycle. I think the presidential elections are next year. Gee. And then lawsuits will follow. You don't have to wait.

Starting point is 00:10:53 The NLRB gave you exactly what you needed. The FTC, the Federal Trade Commission, is going to be delayed and stalled. But the NLRB says this is the law of the land, and you're going to follow it. Good luck, and stay tuned. If you like the Employee Survival Guide, I'd really encourage you to leave a review. We try really hard to produce information to you that's informative, that's timely, that you can actually use and solve problems on your own and at your employment. So if you'd like to leave a review anywhere you listen to our podcast, please do so. And leave five stars because anything less than five is really not as good, right?

Starting point is 00:11:38 I'll keep it up. I'll keep the standards up. I'll keep the information flowing at you. If you'd like to send me an email and ask me a question, I'll actually review it and post it on there. You can send it to MCARUY at CAPCLaw.com. That's CAPCLaw.com.

Employee Survival Guide® - When the Earth Shifted: The Banning of Non-Competition Agreements

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