First, the NLRB just quietly backed off its aggressive stance that most noncompetes violate federal labor law. The agency's Acting General Counsel rescinded 2023's memo that took that position, signaling a retreat from treating noncompetes as an unfair labor practice.
Meanwhile, Ohio lawmakers are headed in the opposite direction. Last month, they introduced SB 11, a bipartisan bill that would ban nearly all noncompetes in the state. If it passes, it'll be a game-changer, giving employees much more freedom to jump to competitors.
The contrast is pretty stark. While the NLRB is easing up, state legislatures are doubling down on efforts to kill noncompetes. And it's not just Ohio—at least a dozen states, both red and blue, have already taken action to limit or ban them.
What does this mean for employers? Don't assume noncompetes are going to stick around. Even if the NLRB is slowing its roll, the bigger trend is clear: these agreements are on the chopping block. Now's the time to rethink your approach to restrictive covenants.
Here's my suggestion:
📃 If you're worried about protecting confidential information, a non-disclosure agreement (NDA) might be all you need.
📃 If you don't want employees poaching your customers, employees, or vendors, a non-solicit (plus an NDA) should do the trick.
📃 If an employee's role is so unique that their departure to a competitor would cause real damage, then—and only then—should you consider a noncompete (plus an NDA and non-solicit).
The key is common sense. Don't overuse noncompetes just because you can. Tailor your agreements to what you actually need to protect. Otherwise, you're just throwing money away trying to enforce a contract that might not hold up in court. And while that's great for lawyers like me, it's terrible for your business.