On February 14, 2025, William Cowen (“Cowen”), the Acting General Counsel for the National Labor Relations Board (the “NLRB” or the “Board”) issued a memorandum rescinding more than a dozen policy memoranda issued by his predecessor, Jennifer Abruzzo (“Abruzzo”), who served as the NLRB’s General Counsel during the Biden administration until President Trump terminated her from the position on January 27, 2025. Citing a growing and unsustainable backlog of cases as the basis, Cowen rescinded policy and guidance memoranda that were controversial when issued, specifically including (1) GC 23-08, concerning non-compete agreements in employment contracts and severance agreements, and (2) GC 25-01, concerning “stay-or-pay” agreements requiring employees to pay back certain benefits provided by employers when employees separated from employment prior to the expiration of a defined period.

Background: General Counsel Memoranda

General Counsel memoranda are nonbinding policy guidance issued directly by the NLRB’s General Counsel or, as in this case, Acting General Counsel. The memoranda are generally directed to the NLRB’s regional field offices, and they are used as a tool to instruct the Board’s field staff about the General Counsel’s policy and enforcement goals.

During Abruzzo’s tenure as General Counsel, she issued numerous such memoranda that were seen as expanding previous interpretations of federal labor law to effectuate Abruzzo’s pro-union policy goals. The guidance contained in these memoranda, for example, limited employers’ abilities to lawfully communicate with employees, endorsed a more expansive definition of protected, concerted activity, and called for more aggressive enforcement of the National Labor Relations Act (the “NLRA”) against employers.

Cowen’s GC Memorandum 25-05

The memorandum Cowen issued on February 14, 2025—GC 25-05—explained that the Board has “seen [its] backlog of cases grow to the point where it is no longer sustainable.” In light of this unsustainable backlog of cases, Cowen conducted a review of active General Counsel memoranda and determined that numerous rescissions were warranted.

Among the key rescinded memoranda for employers were GC 23-08 and 25-01. GC 23-08 declared that “[e]xcept in limited circumstances . . . the proffer, maintenance, and enforcement” of non-compete agreements in both employment contracts and severance agreements violate the NLRA because such agreements unlawfully interfere with employees’ exercise of Section 7 rights. GC 25-01 similarly declared that “stay-or-pay” provisions—agreements where employees are asked to repay their employer certain funds if they separate from employment prior to the expiration of a designated stay period—“infringe on employees’ Section 7 rights in many of the same ways that non-compete agreements do and . . . therefore also violate Section 8(a)(1) of the Act unless narrowly tailored to minimize that infringement.”

In addition to these memoranda, Cowen’s memorandum also rescinded Abruzzo’s guidance in GC 23-05, concerning the interpretation of the Board’s decision in McLaren Macomb, 372 NLRB No. 58 (2023). As previously reported, Abruzzo’s GC 23-05 endorsed an expansive interpretation of McLaren Macomb to broadly prohibit non-disparagement and confidentiality provisions presented to employees in severance agreements. Cowen’s memorandum also rescinds Abruzzo’s guidance regarding whether college athletes should be considered employees, universities’ disclosure obligations under the NLRA, mandatory work meetings to discuss labor issues, and remedies available for violations of the NLRA, amongst other topics.

Practical Impact and Takeaways

Cowen’s memorandum is not binding law, and it does not reverse the current application of the recent decisions, such as McLaren Macomb, that it calls into question. If formal reversal of these decisions were to occur, it would likely take some time, particularly considering that the NLRB currently lacks a quorum following President Trump’s termination of Board Member Wilcox.

However, GC 25-05 is further evidence the new Administration intends to effect significant policy changes for the NLRB, including a shift in prosecutorial action away from certain of the Abruzzo-led NLRB’s targets over the last four years. These signaled policy changes may inform employers in analyzing the risk associated with the use of previously scrutinized provisions in employment contracts and severance agreements. Further, employers currently involved in matters pending before regional offices of the NLRB may see increased efforts to resolve the matters, including offers of settlement involving less onerous terms than those previously sought by the Board.

Employers should be cognizant and monitor closely for further updates in the near future, including other actions that signal the agency’s enforcement goals and priorities.