NLRB Throws Stay-or-Pay Provisions into the Federal Non-Compete Ban Drama

by Prof. Robert Bloink and Prof. William H. Byrnes

The use of non-compete agreements has been a hot topic lately. While the Federal Trade Commission’s sweeping ban on the use of any non-compete agreements in employment contexts has officially been set aside (pending appeal), business clients shouldn’t think that they’re out of the woods. The National Labor Relations Board (NLRB) has also taken aim at restrictive covenants that can serve to tie an employee to their employer. The NLRB general counsel has now openly stated that she intends to prosecute employers who use overly broad non-compete agreements and stay-or-pay provisions. Employers who are currently making use of either non-compete agreements or stay-or-pay arrangements should carefully evaluate those agreements to ensure that they’re in line with the NLRB position.

The FTC Non-Compete Ban: Background