On February 14, 2025, National Labor Relations Board (NLRB) Acting General Counsel William Cowan rescinded prior guidance (McLaren Macomb) that sought to limit the use of non-compete agreements under the National Labor Relations Act (NLRA). The rescinded memos, issued by former General Counsel Jennifer Abruzzo, had advocated for a more aggressive approach in challenging restrictive covenants, arguing they unlawfully restricted employees’ rights under Section 7 of the NLRA. This shift signals a change in enforcement priorities and reduces the likelihood of broad NLRB challenges to non-compete agreements.
What This Means for Employers
While this rescission does not automatically make non-compete agreements lawful, it suggests that the NLRB is less likely to prioritize enforcement actions against employers using restrictive covenants. However, state laws continue to evolve, with many jurisdictions imposing new limitations on non-competes. Employers should still exercise caution when implementing non-compete and non-solicitation agreements, particularly for non-supervisory employees covered by the NLRA.
Next Steps for Employers
To mitigate legal risks, employers should:
- Review existing non-compete agreements to ensure compliance with applicable state laws and wage thresholds.
- Narrowly tailor restrictive covenants to protect legitimate business interests, such as trade secrets and client relationships.
- Ensure all non-compete agreement templates are reviewed by legal counsel.
- Stay informed on state and federal developments, as state laws remain a key factor in non-compete enforceability.
While federal scrutiny of non-competes under the NLRA may be waning, employers should remain vigilant, as state-level regulations continue to evolve.
