On June 26, 2026, the National Labor Relations Board (NLRB) Division of Advice released an Advice Memo regarding the lawfulness of an employer’s non-compete enforcement action. The Memo concludes that the employer’s non-compete does not violate the National Labor Relations Act (Act) and, accordingly, recommends dismissal of the charge against the employer.
Below, KingSpry’s Employment Law Chair, Avery E. Smith, Esq., explains the background leading to the NLRB’s Advice Memo, the Board’s current position on non-compete enforcement, and what employers should consider when drafting and enforcing restrictive covenants.
Background
On February 14, 2025, Acting General Counsel William Cohen issued Memorandum GC 25-05, rescinding memoranda previously issued by General Counsel Jennifer Abruzzo. Among the memoranda rescinded were 23-08 and 25-01, both of which expressed GC Abruzzo’s position on non-compete agreements.
Memorandum GC 23-08 was issued by GC Abruzzo in 2023 and expressed her opinion that non-compete agreements “interfere with employees’ exercise of rights under Section 7 of the [Act].” “Except in limited circumstances,” she stated, “I believe the proffer, maintenance, and enforcement of such agreements violate Section 8(a)(1) of the Act.” This memo signaled a shift towards disapproval of non-compete agreements.
Section 8(a)(1) of the Act prohibits employers from interfering with, restraining, or coercing employees in the exercise of their Section 7 rights, which include the right to form or join labor unions, collectively bargain, or discuss workplace conditions with one another.
Memorandum GC 25-01 was issued by GC Abruzzo in 2024 and acknowledged the restrictive and harmful financial impact that unlawful non-compete agreements may have on employee wages and benefits. GC Abruzzo further discussed how stay-or-pay provisions may interfere with employees’ Section 7 rights. This memorandum expanded upon her position that non-competes tend to chill employees’ rights under the Act.
Since the rescission of GC Abruzzo’s memoranda, we have seen a shift in Federal policy regarding non-competes. For example, on September 5, 2025, the Federal Trade Commission (FTC) dismissed its appeals in Ryan, LLC v. FTC and Properties of the Villages v. FTC, effectively agreeing to the vacatur of the Biden Administration’s 2024 Non-Compete Clause Rule, which would have banned most non-competes across the nation. Yet, on the same day, the FTC filed a Complaint against a pet cremation company for its unfair use of non-competes. On November 25, 2025, the FTC approved its final order, prohibiting the company from enforcing its non-competes.
Since then, GC Cohen was replaced by GC Carey, and the NLRB’s position on non-competes has been uncertain. Recently, however, the NLRB issued an Advice Memo, signaling a permissive stance on non-competes.
2026 Advice Memo
On June 26, 2026, the NLRB publicly released an Advice Memo regarding a non-compete issue. Specifically, the NLRB was asked whether an employer’s non-compete violated Section 8(a)(1) of the Act; and whether a subsequent lawsuit and related arbitration premised on the non-compete also violated the Act.
The NLRB’s answer: No.
Facts of the Case
The employer, Biotricity, Inc., is a medical-technology company whose employees agreed to a non-compete agreement. The non-compete contained various provisions, including prohibitions on working for competitors, using knowledge of the employer’s confidential information, and soliciting other employees to leave the company.
Biotricity eventually filed a lawsuit against its former employees for breaching their non-compete and confidentiality agreements; misappropriating trade secrets; tortiously interfering with Biotricity’s business; breaching their duty of loyalty; and engaging in civil conspiracy. Thereafter, the former employees challenged the lawfulness of the non-competes.
NLRB’s Position
The NLRB concluded that, “[u]nder current law, an employer does not violate the Act by maintaining non-compete provisions covered by Memorandum GC 23-08, which was rescinded in Memorandum GC-25-05.” Instead, GC Carey is of the opinion that “non-compete agreements do not as a general matter impact employees’ rights under Section 7” and, therefore, the non-compete in this case does not violate Section 8(a)(1).
The Advice Memo also notes that the related lawsuit and arbitration are not unlawful, because the lawsuit was not filed in retaliation of the former employees’ challenge and does not seek an illegal objective, as Biotricity’s claims are premised on a lawful non-compete.
Key Takeaways for Employers
While the NLRB’s position on non-competes continues to develop, the Advice Memo is a signal that the Board is unlikely, under current leadership, to challenge non-compete agreements solely on the theory that they might chill employees’ Section 7 rights. In particular, the Memo indicates that non-competes do not, generally, interfere with Section 7 rights under the Act.
For employers, this does not mean that every restrictive covenant is automatically lawful or enforceable. Rather, it reinforces the importance of careful drafting, consistent enforcement, and continued attention to applicable federal, state, and local law.
Key takeaways for employers include:
1. Non-competes may remain viable under the Act. The Advice Memo suggests that the NLRB is not currently treating non-compete agreements as inherently unlawful under Section 8(a)(1).
2. Employers should still avoid overbroad restrictions. Non-competes should be narrowly tailored to protect legitimate business interests, such as confidential information, trade secrets, customer relationships, or specialized training.
3. State and local law still matter. Even if a non-compete does not violate the Act, it may be limited or prohibited by other jurisdiction-specific rules.
4. Enforcement decisions should be made carefully. Before filing a lawsuit against former employees, employers should confirm that the non-compete is lawful, the facts support enforcement, and the action is not retaliatory.
5. Periodic auditing remains important. Employers should periodically review existing employment agreements to ensure they reflect current legal standards and business needs.
