May 30 (Reuters) – Requiring workers to sign agreements not to join competitors is usually illegal, a U.S. Business Council official said on Tuesday, in the latest attempt by government regulators to curb the practice.
National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo at note The agency’s attorneys said the so-called “incomplete agreements” discourage workers from exercising their rights under US labor law to advocate for better working conditions.
Abruzzo, the appointee of Democratic President Joe Biden, said in a memo Tuesday that ineligible people violate labor law “unless the provision is narrowly tailored to special circumstances that justify an infringement of employee rights.”
Specifically, the agreements can prevent workers from resigning or threatening to do so to demand higher wages or other improvements in the workplace, Abruzzo wrote.
Abruzzo Books Agreements may also be legal when they restrict only the ownership interests of individuals in a competing firm.
The NLRB’s general counsel serves as plaintiff and brings unfair labor practices cases to the separate five-member board, which currently has a Democratic majority.
The US Federal Trade Commission, which enforces antitrust law, proposed a rule in January that would prevent companies from requiring workers to sign incomplete judgments. The proposal is pending.
a 2021 academic study It found that about 18% of American workers, however, were subject to incomplete agreements. The study found that this included more than 13% of workers earning less than $40,000 a year.
California, Oklahoma, and North Dakota have banned non-compete agreements, and about a dozen other states have passed laws limiting their use.
Business groups said noncompete people are an important way for companies to protect trade secrets and that they enhance competitiveness. But many Democrats and labor advocates say the agreements reduce wages and make workers less mobile.
Abruzzo asked the agency’s attorneys to send cases to her office involving illegal illegal persons. Her office can use one of these cases to request the board to restrict or prohibit the use of noncompete persons.
(Reporting by Daniel Wiesner in Albany, NY; Editing by Alexia Garamfalfi and Aurora Ellis)
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Dan Wiessner (@danwiessner) reports on labor, employment, and immigration law, including litigation and policymaking. He can be contacted at [email protected].
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