On June 26, 2026, the NLRB's Division of Advice issued an advice memorandum signaling a significant shift in how the Agency will evaluate non-compete agreements under the National Labor Relations Act (NLRA). The memorandum recommends dismissal of charges challenging six-month non-compete and confidentiality provisions signed by former employees who left to work for a competitor.
Most significantly, the Division stated that General Counsel Crystal Carey “is of the view that non-compete agreements do not as a general matter impact employees’ rights under Section 7.” That position marks a sharp departure from former General Counsel Jennifer Abruzzo's view that overbroad non-compete agreements generally chill employees' exercise of protected concerted activity.
Background
Former General Counsel Abruzzo argued that overbroad non-compete agreements unlawfully restrict employees' Section 7 rights by limiting their ability to seek or threaten to seek alternative employment as part of protected concerted activity. Although she advanced that position in a 2023 General Counsel memorandum, the Board never adopted the theory in a precedential decision. In 2025, then-acting General Counsel William Cowen withdrew Abruzzo’s memoranda, and this latest advice memorandum provides the clearest indication yet that NLRB prosecutors will no longer pursue that theory as a general matter.
The advice memorandum
Two former employees left their employer to work for a competitor after signing agreements containing six-month non-compete, confidentiality, non-solicitation, and non-disparagement provisions.
The Division of Advice recommended dismissal of the charges, concluding that:
Non-compete agreements do not, as a general matter, interfere with employees' Section 7 rights.
The confidentiality provision was lawful because employees would reasonably understand it to prohibit disclosure of confidential company information to competitors—not protected communications among employees.
Although the non-disparagement provision and certain other restrictions were “arguably unlawful,” dismissal was appropriate because the employer had not enforced those provisions against the charging parties.
The employer’s state-court litigation and arbitration were not retaliatory because they sought to enforce agreements that remain lawful under current Board law.
Why it matters
The memorandum is the strongest indication to date that NLRB prosecutors will not challenge non-compete agreements based solely on the theory that they chill Section 7 rights. However, employers should not view the memo as blanket approval of restrictive covenant agreements. The memorandum also demonstrates that surrounding provisions—and how an employer enforces them—remain relevant to the analysis.
Non-competes remain viable under the NLRA—for now. Current NLRB prosecutors are unlikely to challenge non-compete agreements based solely on the theory that they generally interfere with Section 7 rights, consistent with General Counsel’s Carey’s position.
The memo is not binding precedent. It reflects the current General Counsel’s prosecutorial position, not Board law, and does not bind Administrative Law Judges or the Board.
Review restrictive covenants holistically. Confidentiality, non-disparagement, non-solicitation, and similar provisions may still create NLRA risk depending on their language and enforcement.
Continue monitoring state law. Even if the NLRA presents less risk, employers should continue reviewing restrictive covenant agreements for compliance with applicable state laws and other federal requirements.