NLRB Advice Memoranda, Dental Health Associates of Madison Ltd., National Labor Relations Board, (Nov 20, 2023)

The Region submitted this case for advice, pursuant to Memorandum GC 23-08, Non-Compete Agreements that Violate the National Labor Relations Act, dated May 30, 2023, on whether a non-compete provision in an employment agreement violated the Act. We conclude the charge should be dismissed, absent withdrawal.

The Charging Party is ​     ​ who was employed by the Employer. When ​     ​ was hired, the Charging Party signed an employment agreement that contains, among other things, a non-compete provision prohibiting ​     ​ from “providing services as ​     ​ either through any kind of ownership or as a director, officer, principal, agent, employee, advisor, consultant, co-partner or in any individual or representative capacity whatsoever, … within a radius of five miles” of any Employer office where the Charging Party worked at least one day per week. The restriction was to commence when the Charging Party's employment terminated and continue for twelve months thereafter. While still employed by the Employer, the Charging Party purchased a competing ​     ​ office located within a five-mile radius of the Employer's office. After finding out, the Employer terminated the Charging Party and sued ​     ​ . The Charging Party did not engage in protected concerted activities prior to ​     ​ termination. [1]

In ​     ​ we instructed the Region to urge the Board to find that maintaining an overly broad non-compete provision violates the Act absent special circumstances. Such provisions restrict employees from accessing alternate employment and thus have a reasonable tendency to chill employees in the exercise of Section 7 rights generally, and they specifically chill concertedly threatening to resign to improve terms of employment, carrying out such threats, soliciting coworkers to go work for a local competitor as part of a broader course of protected concerted activity, concertedly seeking or accepting employment with a local competitor to obtain better working conditions, and being paid to organize a given employer's employees. See also Memorandum GC 23-08, at 3-4.

Here, we need not decide whether the non-compete provision violates the Act under the above principles, because there is neither a violation of extant law nor a related meritorious allegation. [2] ​     ​ see also VOS Electric Inc., Case 18-CA-320356, Advice Closing Email dated Nov. 6, 2023. Accordingly, the Region should dismiss the charge, absent withdrawal.

This email closes this case in advice as of today.

We also analyzed the confidentiality provision in the Charging Party's employment agreement. Considering the confidentiality provision's language regarding trade secrets, patient records, and similar information, we do not believe it interferes with, restrains, or coerces the exercise of Section 7 rights.

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