FTC Non-compete Ban Struck Down Nationwide

In May 2023, NLRB General Counsel Jennifer Abruzzo issued a memo challenging non-compete agreements, arguing they might limit employees’ rights to seek new employment under the National Labor Relations Act (NLRA). Recently, in October 2024, she expanded her stance to include concerns about “stay-or-pay” provisions, which require employees to repay bonuses or relocation costs if they leave within a specific timeframe. 

Although not yet law, Abruzzo’s stance is a clear signal that the NLRB may pursue cases against employers who enforce these agreements without a strong, justifiable business reason. Her latest memo suggests penalties for companies maintaining unlawful non-compete or stay-or-pay agreements, including notice-posting requirements and potential damages for affected employees. 

What Employers Should Do 

While these changes are still pending, employers are advised to: 

• Review current non-compete and stay-or-pay provisions to ensure they have a legitimate business purpose. 

• Assess risks and make any necessary adjustments before December 6, 2024. 

• Call Envision Benefits Group for additional guidance on these topics and more.  

This proactive approach will help reduce the risk of claims and align with potential new NLRB expectations around employee agreements.