NLRB judge declares non-compete clause is an unfair labor practice

Original Article ↗ Hacker News Discussion ↗

Salting, union rights, and lying about work history

  • Many were surprised that “salting” (getting hired to organize a union) and lying about union-related employment can be protected activity.
  • Clarification from the thread: protection is narrow — you can misstate or omit union-affiliated employers, but not fabricate skills, degrees, or entire careers.
  • Rationale argued by supporters: if employers can fire for “lying” about union work, they can indirectly punish protected union activity and make salts unemployable.
  • Critics find this counterintuitive or “ridiculous,” worrying it legitimizes lying; others respond that it’s analogous to lying about pregnancy or union affiliation where disclosure would enable illegal discrimination.

Scope and process of the NLRB ruling

  • This is an Administrative Law Judge (ALJ) decision, described as a strong recommendation to the NLRB, not final law.
  • A 3‑member NLRB panel must accept or modify it; then it can be appealed to a federal circuit court, which has final say.
  • Several commenters expect challenges, especially given the Supreme Court’s hostility to broad administrative power and Chevron deference.

Economics and fairness of non-competes

  • Widespread sentiment: unpaid or broad non-competes, especially for junior or hourly workers, are unfair and anti–free market.
  • Some argue they create a labor monopsony, suppress wages, and resemble historical “enclosures” that convert open opportunities into rent-extraction.
  • Support for requiring pay (e.g., garden leave) and strict limits on duration and scope; some propose making enforcement extremely expensive to employers.
  • Others note that overbroad non-competes are already often unenforceable, though practice varies by state and industry and creates chilling effects.

Industry practices and garden leave

  • Finance: garden leave (paid non-work period) is common; seen as tolerable at 3–6 months, but 12–18 months becomes highly punitive despite pay.
  • Private equity in medical and veterinary practices reportedly uses non-competes to lock in staff and raise prices; even some conservative states are moving to curb this.

Non-solicitation and references

  • Non-solicitation clauses can be extremely long (e.g., 5 years), raising fairness concerns.
  • Some companies bar managers from giving any references to avoid defamation suits; critics see this as another mobility- and wage-suppressing practice, though others argue it’s a rational legal risk response.

International comparisons

  • Commenters contrast the U.S. with Europe:
    • Germany: certain questions (pregnancy, union status) can be legally answered with lies; employers must provide work certificates, but they’ve evolved coded positivity.
    • UK: non-competes often seen as hard to enforce if they prevent earning a living, but there are moves to formalize caps (e.g., 3 months).