Labor & Employment Law Daily Wrap Up, NLRB NEWS—Advice Division again counsels region not to pursue claims based on non-compete agreement, (Jul 10, 2026)

By Brandi O. Brown, J.D.

The Division continues to narrow the circumstances under which noncompete agreements will draw scrutiny under the NLRA, finding lawful a former employer’s restrictive covenant and related enforcement lawsuit.

In a new memo from the NLRB Division of Advice, it has further cemented reversal from Biden-era NLRB guidance regarding noncompete agreements and how they may unlawfully interfere with employees’ rights under the NLRA. A few months ago, the Division issued an advice memo taking its first big step, in practice, away from the former General Counsel’s view and with this new advice memo, it is taking another.

New administration, new interpretation. In a May 2023 memorandum (GC 23-08), then-NLRB General Counsel Jennifer Abruzzo set forth her view that noncompete provisions in employment contracts and severance agreements violate the National Labor Relations Act and she instructed NLRB regions to seek make-whole relief for impacted employees. In October 2024 she issued another memorandum (GC 25-01), relating to remedying the harmful effects of non-compete and stay-or-pay provisions. However, in February 2025, under the new administration, NLRB Acting General Counsel William B. Cowen issued a memo (GC 25-05) rescinding those memos.

March advice memo. Thereafter, in an advice memo released by the NLRB in March, the agency put that guidance into practice in a matter that had been submitted by a region regarding a non-compete provision used by a broadcast television station. It instructed the region to dismiss allegations related to (1) a noncompete agreement not to engage in any similar business in the defined region during and for a period of one year following termination and (2) a separation agreement that included a covenant not to solicit certain customers of the television station for one year.

Another memo advising dismissal. Now, in a more recent memo, the NLRB Division of Advice has concluded that unfair labor practice charges against Biotricity, Inc., a medical-technology company specializing in remote patient monitoring, for alleged violations of Section 8(a)(1) of the National Labor Relations Act, should be dismissed. The case involved two former employees who left Biotricity and later accepted positions with a competitor. While employed, both employees signed non-compete agreements containing restrictions on competitive employment, use of confidential information, employee solicitation, inducement of third parties to do business with competitors, and disparagement of the company.

After the employees departed, Biotricity filed a state-court lawsuit asserting that they had violated the noncompete agreement and other contractual obligations. The company also alleged misappropriation of trade secrets, breaches of loyalty and confidentiality obligations, tortious interference with business relationships, and related claims. The dispute subsequently moved into arbitration proceedings. The employees responded by filing unfair labor practice charges, contending that both the restrictive covenants and the employer’s efforts to enforce them violated the Act.

Non-compete not a violation. The Division of Advice first addressed the legality of the Non-Compete Agreement itself. It concluded that the agreement’s core noncompete provision did not violate Section 8(a)(1). The memorandum noted that prior General Counsel guidance critical of noncompete agreements had been rescinded and that, under current enforcement policy, noncompete clauses generally are not viewed as interfering with employees’ Section 7 rights. As a result, the six-month restriction on employment with competitors was deemed lawful.

Confidentiality okay too. Advice also found the agreement’s confidentiality provision lawful. Although the provision broadly defined confidential information and included references to payroll and personnel information, the provision appeared in the context of a noncompete agreement focused on safeguarding the employer’s competitive interests, and it was accompanied by numerous examples of business-related confidential information. Thus, the Division explained, employees would reasonably understand the clause as protecting the employer’s proprietary business information rather than restricting discussions protected by the Act. In addition, the employer maintained a separate confidentiality agreement directed at customer, financial, and business information, reinforcing that interpretation.

“Noneffectuation.” The memorandum acknowledged that certain portions of the non-solicitation, inducement-of-third-parties, and non-disparagement provisions could arguably raise concerns under the Act. Nevertheless, the Division recommended dismissal of those allegations on “noneffectuation” grounds. Biotricity had not relied on those provisions in its litigation or otherwise attempted to enforce them against the charging parties, and some of the restrictions had already expired. Under those circumstances, the Division concluded that pursuing a complaint would not advance the purposes and policies of the Act.

Finally, the Division addressed the employer’s lawsuit and the related arbitration proceeding. Applying Supreme Court precedent, it concluded that the litigation was not unlawful because there was no evidence that it had been filed in retaliation for protected concerted activity. The claims were based on contractual and business-related disputes rather than conduct protected by the NLRA, the Division concluded. It further determined that the lawsuit did not seek an illegal objective because it was premised largely on enforcement of a lawful noncompete provision. The memorandum also rejected any argument that the state-court action or arbitration was preempted by the NLRA, finding no issues that fell within the Board’s primary jurisdiction. Accordingly, the Division instructed the Region to dismiss the charges absent withdrawal.

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