Noncompete clauses 'chill' worker rights and are usually illegal: NLRB

Companies that force workers to sign"noncompete" clauses are likely breaking the law, infringing not just on those employee's freedom to find a better job but their ability to defend themselves and their colleagues at their current workplace, the top lawyer for the National Labor Relations Board said this week, marking a shift in policy under President Joe Biden that could impact millions of Americans.

A person barred from moving to another company in their chosen profession, at least for a set amount of time, is less likely to fight for change at their current employer, Abruzzo argued in the memo, issued Tuesday, knowing that could well make them a target for termination; employers likewise have little reason to fear that disgruntled workers will be snatched up by a competitor, thus reducing the latter's bargaining power.

According to Abruzzo, there are some circumstances where employers may indeed have the right to insist on a noncompete clause, such as prohibiting an employee from having a managerial or ownership interest in a competitor. But, in general, she is urging NLRB staff to not only reject such clauses but, in disputes where they come up, make employers fully compensate those employees who"can demonstrate that they lost other opportunities.

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