/>iEarlier this month, the Acting General Counsel of the National Labor Relations Board (NLRB), William Cowen, rescinded a slew of his predecessor’s policy memoranda. While general counsel (GC) memoranda are not the official legal position of the NLRB, if adopted by the Board they could have far-reaching ramifications for covered employers.
New GC typically unwind the GC Memos of their predecessor and, in this case, the action is consistent with the overall approach of the Trump Administration to roll back actions taken by Biden appointees.
By rescinding GC memoranda, Cowen has signaled that he will no longer seek to enforce actions against employers based on violations of the policies expressed in the memoranda. The action may also mean that for parties with active matters before the NLRB relating to the rescinded memos, resolution may be faster and more employer-friendly. It is important to note that because President Trump removed GC Jennifer Abruzzo and former NLRB Member Gwynne Wilcox immediately following the inauguration, the NLRB does not currently have enough members to form a quorum, meaning that it cannot issue decisions.
Among the more than 25 rescinded memoranda were two addressing topics critical to employers:
With respect to severance agreements, GC Abruzzo had taken the position that overly broad nondisparagement and confidentiality clauses often interfere with, restrain, or coerce employees’ exercise of Section 7 rights. As a result, many employers significantly narrowed these provisions in severance agreements with employees who are covered by the National Labor Relations Act (NLRA). By rescinding GC 23-05, the Acting General Counsel has backed away from Abruzzo’s interpretation of the NLRA.
With respect to noncompete agreements, the now-rescinded memoranda had expressed the NLRB’s position that (1) nearly all noncompete provisions are overbroad and therefore interfere with the exercise of employees’ Section 7 rights, and (2) employees should be entitled to significant damages relating to their misuse. The Acting General Counsel’s actions in rescinding these memoranda are also consistent with positions taken by the new chair of the Federal Trade Commission, Andrew Ferguson, disapproving the noncompete ban passed under former chair, Lina Khan. Although employers must continue to comply with the patchwork of state laws relating to the enforcement of noncompete provisions, it is unlikely that these restrictions will be the target of federal attention under a Republican-controlled government.
We will continue to monitor changes at the NLRB and report on the associated impact to employers.
