The NRLB Chimes in on Non-Competes

A few months ago the NRLB made some noise when it imposed restrictions on non-disparagement and confidentiality provisions in releases/settlement agreements. Now it’s back at it with non-competes following the footsteps of the FTC.
In her memo, General Counsel Jennifer Abruzzo asserted that non-compete agreements impact the ability of employees to exercise their right to quit or change jobs. Though not outright declaring all non-competes unenforceable, she advises limiting their use. So without a doubt the FTC has non-competes in its cross-hairs with the NRLB behind.
At this point we don’t have anything definitive from either agency. What we do have are a number of state legislatures limiting or outlawing non-competes. Yesterday the New York state senate passed non-compete legislation and it is likely to be signed by the governor. New York follows Minnesota and a number of states that enacted legislation in 2022.
Instead of worrying about what the FTC/NRLB may or may not do employers should be focused on changes impacting non-compete law in states where they employ workers. The good news for Texas employers is there are no changes to the Texas non-compete statute this session. We have other things to worry about.

Texas non-compete law has changed very little over the last few years. There have not been any seminal Texas Supreme Court cases construing the Texas non-compete statute and little instructive case law from our intermediate appellate courts providing guidance. The reality is Texas trial judge are construing non-competes at the temporary restraining order/temporary injunction stages all the time but Texas trial judges don’t issue published opinions and we don’t see many appeals from those decisions.



At the outset of most employment relationships, the employer will have an employee sign a litany of documents ranging from a IRS form W4 to a non-compete agreement. Buried within those documents is usually some form of a confidentiality agreement. Within the agreement the employee agrees not to share any of the employer’s confidential information while an employee and after they depart. Sometimes the agreement is referred to as a non-disclosure agreement or NDA. Here is an example of a clause from such an agreement:

