NLRB Rescinds Memos on Restrictive Covenants, Offering Relief to Employers

On February 14, 2025, NLRB Acting General Counsel William B. Cowen rescinded memoranda that had deemed certain non-compete and stay-or-pay agreements as violating the National Labor Relations Act (NLRA). This reverses the stance of former GC Jennifer Abruzzo. While this is positive for employers, the rescission doesn't eliminate all legal risk. Existing NLRB case law and conflicting ALJ decisions remain, requiring employers to carefully consider state law and tailor restrictive covenants to protect legitimate business interests.