by On June 13, 2024, a National Labor Relations Board (NLRB) administrative law judge found that noncompete and non-solicitation provisions of a technician’s employment agreement were unlawful interference with employee rights under Section 7 of the National Labor Relations Act (Section 7). The decision is consistent with the position taken by the NLRB General Counsel last year in a memorandum to NLRB enforcement staff that noncompete agreements in non-union workplaces interfered with employee rights under Section 7. The case of J.O. Mory, Inc. is the first decision applying the General Counsel’s position. Among other penalties and employer requirements, the judge ordered the employer to rescind all such agreements and notify current and former employees the provisions were no longer valid.
The employee in the case was fired from a technician position with a heating and air conditioning business. The employer claimed it had discharged the employee after discovering he had falsely claimed to have previously worked for a non-union shop. The employee admitted he had taken the job with J. O. Mory, Inc. in order to organize a union. The judge held that the employer had unlawfully fired the employee for engaging in Section 7 protected activity and ordered the employee reinstated with backpay and other compensation.
The judge found three provisions of the employee agreement to interfere with the employee’s Section 7 rights:
- A provision prohibiting former employees from directly or indirectly working for a competitor of the employer for twelve months following termination;
- A provision prohibiting employees and former employees from soliciting or encouraging any other employee to leave the employer; and
- A provision requiring employees to report any offers to leave the employer that they may receive from third parties.
The judge stated that the provisions unlawfully had a chilling effect on the legally protected actions of current and former employees. The judge further found that the provisions served no legitimate business interest of the employer.
The ruling may be found at https://www.nlrb.gov/case/25-CA-309577.
