Labor & Employment Law Daily Wrap Up, NLRB NEWS—Employer’s non-solicitation agreement did not hinder employee’s subsequent job search, (Sep 30, 2025)

By Patricia K. Ruiz, J.D.

The NLRB found insufficient evidence that the provision, and not the charging party’s conduct or the ensuing legal dispute, made it difficult for the charging party to obtain employment.

The National Labor Relations Board (NLRB) determined that an employer’s non-solicitation agreement, signed after an employee’s resignation to work with a competing company, was lawful under the National Labor Relations Act (the Act). According to an advice memorandum issued December 27, 2024, and released September 29, 2025, the NLRB determined that the provision did not cut off the charging party’s employment opportunities in the industry.

Offered another job, stayed. The charging party was employed by Star Crane & Hoist, Division of Lift Solutions, (Star Crane), where the charging party’s compensation was based in part on commission. Due to changes in the commission structure, which the charging party believed would reduce their income, the charging party began seeking new employment, ultimately obtaining a job offer with Central Industrial Services Ground (CISG), one of the employer’s competitors.

When the charging party informed Star Crane of their resignation, Star Crane asked if there was anything the company could do to avoid it. In response, the charging party asked to work under the former commission structure, and Star Crane assented, requiring the charging party to sign an agreement under which the charging party could not disclose their compensation details to other Star Crane employees.

Offered another job, left. Later, after expressing concern about purported “hidden fees” that were inflating the cost to customers and making it harder for the charging party to hit sales goals, the charging party reached out to CISG about the position it previously offered. The charging party put in two weeks’ notice to Star Crane, informing the employer they were going to work for a competitor.

Separation agreement. Star Crane told the charging party their resignation had to be effective immediately because of the charging party’s near constant contact with customers. Star Crane presented the charging party with a separation agreement providing that the charging party would “refrain from soliciting any of the company’s customers and would refer customers back to the company if the customers made contact directly.” The charging party signed the agreement but claims not to have noticed the non-solicitation language.

Email to customers. Subsequently, the charging party sent a mass email to 49 major customers of Star Crane stating that Star Crane had been acquired by a larger crane company, causing prices to go up. The charging party further stated that CISG would refrain from markups and hidden fees and calling for the customers to contact CISG for quotes.

Star Crane sent a cease-and-desist letter to the charging party alleging breach of the separation agreement and arguing that the email constituted a common law tort, including tortious interference with contract and unfair competition. The letter demanded CISG assure Star Crane that the charging party would “no longer work in a capacity that could be considered in competition with Star Crane or would inevitably require [the charging party] to disclose Star Crane’s confidential information.”

While attempting to come to a settlement, CISG terminated the charging party’s employment, stating it could not afford both the charging party’s salary and the attorney’s fees it was paying because of the dispute. The charging party was not able to obtain employment in the crane industry and now works in a different field.

Non-compete and nonsolicitation agreements. Under the Act, non-compete provisions are overbroad when they could reasonably be construed by employees to deny them the ability to quit or change jobs by cutting off their access to other employment opportunities that they are likely most qualified for based on their experience, aptitudes, or preferences. In contrast, employers have a legitimate interest in preserving their customer base, but prohibitions on post-employment solicitation of customers in some instances can constitute de facto non-compete agreements where they have effectively cut off employees’ access to job opportunities in their field. As such, the NLRB has found such prohibitions to be lawful where they are for a reasonable period and the industry is not so small that such a ban would foreclose similar employment with other employers. Such prohibitions are unlawful where they operate for an unreasonable duration and preclude working with or having access to customers that no longer have a business relationship with the employee’s former employer.

Non-solicitation provision was lawful. The NRLB found insufficient evidence to conclude that the prohibition on soliciting Star Crane’s customers operated to cut off the Charging Party’s access to other employment opportunities in the crane industry. While the non-solicitation provision is potentially concerning given its unlimited duration, the NLRB found insufficient evidence to conclude the industry is so small that the provision, standing alone, would preclude the charging party from gainful employment. The NLRB further found insufficient evidence to conclude that the provision, standing alone, and not the charging party’s conduct or the ensuing legal dispute, is what made it difficult for the charging party to obtain employment in the crane industry after the termination from CISG.

Importantly, the NLRB noted, the provision is limited to Star Crane’s current customers, not former or potential customers, and it does not restrict the charging party from working with those customers at all in the future, only soliciting them. The NLRB concluded that the proffer, maintenance, and enforcement of the provision restricting customer solicitation did not violate the Act.

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