NLRB judge declares non-compete clause is an unfair labor practice
A U.S. National Labor Relations Board administrative judge has ruled that broad non-compete agreements can constitute an unfair labor practice, and that “salts” (covert union organizers) may lawfully misrepresent past union employment on resumes because employers are not allowed to act on that information. Commenters debate the legal boundaries of lying in hiring, the likely fate of such rulings under a conservative Supreme Court, and how much authority NLRB and other agencies actually have to curb non-competes. Many also criticize unpaid or lengthy non-competes and related tactics (like bans on references) as anti-competitive tools that suppress wages and worker mobility, with some pointing to alternatives like paid garden leave or strict limits on enforceability.
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).