As part of a continuing effort to challenge certain non-compete agreements as violating Section 7 of the National Labor Relations Act (NLRA), in October 2024, NLRB General Counsel Jenifer Abruzzo issued GC Memo 25-01. The memo focuses on certain “stay-or-pay” provisions, which the memo states are unlawful under the NLRA. The memo provides a framework to assess the legality of these provisions. It advises employers to do more than just rescind non-compete clauses; the NLRB also should seek traditional remedies for any unlawful provisions, in line with Board law. Employers have until December 6, 2024, to amend any stay-or-pay provisions that serve a legitimate business interest.
With a second Trump administration taking over in 2025, it is expected that the newly appointed NLRB General Counsel will rescind this memo and dismiss any pending charges related to this issue. Read more.
