The National Labor Relations Board (NLRB) has signaled a significant shift in its approach to non-compete agreements. On June 26, 2026, the NLRB’s Division of Advice issued a memorandum recommending dismissal of charges challenging several restrictive covenant provisions, including a six-month non-compete agreement signed by former employees who later joined a competitor. Most notably, the Division stated that the current NLRB General Counsel believes non-compete agreements generally do not interfere with employees’ rights under Section 7 of the National Labor Relations Act (NLRA). While the memorandum is not binding law, it provides the clearest indication yet that the current NLRB is moving away from the aggressive enforcement position taken in recent years.
At Forework, we review the need for restrictive covenants for each client, confirming whether the covenant is necessary (for business reasons), legal, and enforceable. If appropriate, we prepare properly crafted restrictive covenants that protect the Company’s bottom line! That’s just one more way that Forework does it differently! We don’t just process your payroll and new hires; we protect your business through strategic and smart HR technology, documents, and procedures.
A Significant Change from Prior NLRB Leadership
The memorandum represents a marked departure from the position advanced by former NLRB General Counsel Jennifer Abruzzo.
In 2023, Abruzzo argued that broad non-compete agreements unlawfully restricted employees’ Section 7 rights because they could discourage workers from seeking alternative employment or engaging in protected concerted activity.
Although that position generated considerable attention, the NLRB itself never formally adopted it in a precedential decision.
In 2025, Acting General Counsel William Cowen withdrew several of Abruzzo’s guidance memoranda. This latest Advice Memorandum further confirms that current NLRB prosecutors are unlikely to pursue challenges to non-compete agreements based solely on that theory.
The Case Before the NLRB
The matter involved two former employees who resigned and accepted employment with a competitor after signing agreements containing:
- A six-month non-compete provision;
- Confidentiality obligations;
- Non-solicitation restrictions; and
- A non-disparagement clause.
After reviewing the case, the Division of Advice recommended dismissal of the unfair labor practice charges.
Key Takeaways from the Memorandum
Non-Compete Agreements Are Generally Permissible Under the NLRA
The Division concluded that non-compete agreements, standing alone, generally do not interfere with employees’ Section 7 rights under the National Labor Relations Act.
This represents a substantial shift in enforcement policy and provides employers with greater confidence that reasonable non-compete agreements are less likely to face federal labor law challenges.
Properly Drafted Confidentiality Provisions Remain Defensible
The memorandum also found the employer’s confidentiality provision to be lawful.
According to the Division, employees would reasonably understand the provision as prohibiting disclosure of confidential business information to competitors—not preventing employees from discussing wages, working conditions, or other protected workplace issues.
This distinction remains important when drafting confidentiality agreements.
Enforcement Matters
Although the Division suggested that portions of the employer’s non-disparagement language could potentially raise concerns, it nevertheless recommended dismissal because the employer had never attempted to enforce those provisions against the employees.
The memorandum serves as a reminder that how an employer enforces restrictive covenants can be just as important as the language itself.
State Court Enforcement Was Not Considered Retaliation
The employees also argued that the employer’s state-court litigation and arbitration constituted unlawful retaliation.
The Division rejected that argument, concluding that pursuing enforcement of agreements that remain lawful under current Board precedent does not, by itself, violate the NLRA.
Practical Considerations
Employers should consider the following best practices:
- Review restrictive covenant agreements as a whole. Non-compete provisions may receive less scrutiny under the current NLRB, but confidentiality, non-solicitation, non-disparagement, and other post-employment restrictions can still create legal risk if drafted too broadly.
- Be thoughtful about enforcement. Courts and administrative agencies often evaluate not only what an agreement says, but how an employer applies it in practice.
- Monitor state law developments. Many states continue to restrict or prohibit non-compete agreements through legislation or judicial decisions. Even if federal labor law presents fewer obstacles, employers must still comply with applicable state laws governing restrictive covenants.
- Remember that agency priorities can change. This memorandum reflects the current General Counsel’s enforcement position—not binding NLRB precedent. A future Board or General Counsel could adopt a different approach.
Forework Compliance Tip
Restrictive covenant agreements remain an important tool for protecting confidential information, customer relationships, and business goodwill. However, they should never be treated as “one-size-fits-all” documents. Employers should periodically review their non-compete, confidentiality, non-solicitation, and non-disparagement provisions to ensure they remain enforceable under both federal and state law.
Forework helps businesses take a more strategic approach to HR compliance, workplace protections, and the policies that support long-term growth.