Michael S. Ferrell, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Chicago office, was quoted in Laboratory Economics, in “Noncompete Agreements and ‘Stay or Play.’”
Following is an excerpt:
Noncompete Backdrop
The IPA/Goldfinch fight is set against a backdrop of challenges as to whether noncompete agreements are even legal. National Labor Relations Board General Counsel Jennifer Abruzzo on Oct. 7, 2024, issued a memo (Memo GC 25-01) signaling that employers could be prosecuted for violating the National Labor Relations Act (NLRA) and face significant monetary liability for using noncompete and so-called “stay-or-pay” provisions in agreements with their employees.
According to Michael Ferrell, a labor attorney with Epstein Becker Green (Chicago), the new prosecutorial theory advanced by General Counsel Abruzzo applies where an employer uses such agreements with non-supervisory employees and thereby, in Abruzzo’s view, violates the NLRA by restricting or discouraging employees from moving (or threatening to move) to better paying jobs.
“The party that controls the White House determines whether Abruzzo is permitted to finish or possibly extend her term as General Counsel of the NLRB and pursue her aggressive agenda to attack noncompete and stay or pay provisions in agreements with non-supervisory employees,” says Ferrell. “The other possibility is that Abruzzo will be summarily fired on January 20, 2025, and replaced by a more employer-friendly General Counsel who likely will have no interest in trying to expand the NLRA to attack such agreements with employees.”
