One of these, Memorandum GC 23-08, was issued on May 30, 2023, and stated that “[e]xcept in limited circumstances,” the “proffer, maintenance, and enforcement” of non-compete agreements violates the National Labor Relations Act (the “Act”). See NLRB, Office of the General Counsel, Non-Compete Agreements that Violate the National Labor Relations Act, Memorandum GC 23-08, at p. 1 (May 30, 2023) (rescinded Feb. 24, 2025).
Another rescinded memorandum, Memorandum GC 25-01, was issued on October 7, 2024, and built on the first by making recommendations for “remedying the harmful effects of” not only noncompete agreements, but also “stay-or-pay” provisions such as training repayment agreement provisions (also known as “TRAPs”), educational repayment contracts, quit fees, damages clauses, and even sign-on bonuses tied to specific stay periods. See NLRB, Office of the General Counsel, Remedying the Harmful Effects of Non-Compete and “Stay-or-Pay” Provisions that Violate the National Labor Relations Act, Memorandum GC 25-01 (Oct. 7, 2024) (rescinded Feb. 14, 2025).
A third rescinded memorandum relevant to this discussion, Memorandum GC 23-05, had provided guidance about the McLaren Macomb decision, which had found certain separation agreement provisions violated the Act. Memorandum GC 23-05 further called into question the legality of numerous non-disparagement and confidentiality clauses that applied to non-managerial employees covered by Section 7 of the Act and also to supervisory employees under certain circumstances. See NLRB, Office of the General Counsel, Guidance in Response to Inquiries About the McLaren Macomb Decision, Memorandum GC 23-05 (Mar. 22, 2023) (rescinded Feb. 14, 2025).
Little explanation was initially offered for these rescissions, except that “if we attempt to accomplish everything, we risk accomplishing nothing.” NLRB, Office of the General Counsel, Rescission of Certain General Counsel Memoranda, Memo GC 25-05 (Feb. 14, 2025). Then, last September, the Federal Trade Commission formally backed away from its nationwide non-compete ban, as we have previously reported. Given the unified executive priorities, this move suggested that the NLRB might continue to do the same.
At that time, however, the NLRB was still under the temporary leadership under Cowen, such that questions remained as to whether the NLRB or any of its Regional Offices would (at least under this Administration) take the position that certain non-compete agreements or separation agreements might violate the Act. When Cowen was replaced by current General Counsel Crystal Carey in January 7, 2026, it was likewise unclear what her priorities would be for the agency. Moreover, for the companies that had been charged with unfair labor practices under the rescinded memoranda, the issue remained a live controversy.
One such company, Biotricity, Inc. (“Biotricity”), sued two former employees for breach of contract and related torts after they resigned to work for a direct competitor. In response, the former employees filed several charges with the NLRB seeking to invalidate their non-compete agreements in accordance with Memorandum GC 23-08. When that memorandum was later rescinded, the Regional Office overseeing the case (Region 8) submitted the case for advice as to whether either the underlying non-compete or subsequent lawsuit violated the Act. The resulting Advice Memorandum from the NLRB was sent as a case-closing email on May 5, 2026, but subsequently revised, redacted, and released to the public on June 26, 2026.
The Advice Memorandum states unequivocally that “an employer does not violate the Act by maintaining non-compete provisions covered by Memorandum GC 23-08.” NLRB, Division of Advice, Advice Memorandum on Biotricity, Inc., Nos. 08-CA-326334, 08-CA-326335, & 08-CA-367972, at p. 1 (May 5, 2026). Moreover, it clarifies that General Counsel Carey takes “the view that non-compete agreements do not as a general matter impact employees’ rights under Section 7.” Id. Although this decision does not remove the possibility that some non-competes may somehow violate the Act, it strongly indicates that imposition of non-competes will not generally be sufficient to constitute an unfair labor practice.
A related question is whether the NLRB’s decision in McLaren Macomb, 372 NLRB No. 58 (2023), may be modified or lessened, especially in light of the NLRB’s decision to rescind earlier guidance. The recent Advice Memorandum found that broad confidentiality language contained in the non-compete language was lawful because “employees would reasonably understand that the confidentiality provision restricts them from sharing confidential information with competitors, not Section 7-protected communications with fellow employees.” Id. at p. 2. The NLRB declined to closely examine other potentially unlawful language in the non-compete agreement because they had lapsed and “were not enforced” by Biotricity through the lawsuit. Id.
Although the Biotricity decision stops well short of preemptively approving all non-solicitation, confidentiality, and non-disparagement language a company might be inclined to include in a separation agreement, another advice memorandum from late last year may provide further insight (or raise further questions). There, the NLRB cited McLaren Macomb as binding precedent, yet found that a non-solicitation clause was not overbroad because it was “contained in a separation Agreement rather than an employment agreement” such that it could only apply after the conclusion of employment and thus could not “prohibit conduct that the Board has found to be protected, such as employees assisting each other in furtherance of job security and improved benefits.” NLRB, Division of Advice,Advice Memorandum on BAYADA Home Health Care, No. 27-CA-341402, at p. 1 (Dec. 18, 2025). Taken to one logical conclusion, this decision could suggest that separation agreements by definition cannot violate the Act. However, as McLaren Macomb is explicitly cited, the NLRB may intend for readers to draw less sweeping conclusions.
In sum, these Advice Memoranda suggest that the NLRB is softening its stance not only on non-competes, but also other restrictive covenants, cementing an anticipated directional shift.
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