New York state is poised to join four other states in banning employment-related noncompete agreements. In addition to standalone noncompetition agreements, noncompete restrictions on employees within offer letters, employment agreements, stock option agreements and other employment-related agreements, are subject to the new law’s prohibition.
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The General Counsel of the National Labor Relations Board (the Board) issued new guidance announcing her position that certain noncompete agreements violate the National Labor Relations Act. Citing McLaren Macomb, the General Counsel urged the Board to adopt her position regarding noncompete agreements, arguing that the Board already embraced a similarly restrictive standard for analyzing the lawfulness of severance agreements.
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Our latest briefing dives into new local laws about AI and how it affects both employment and insurance industries, the launch of NIST’s Trustworthy & Responsible Artificial Intelligence Resource Center and the plans for it moving forward, new guidance from the FDA on cybersecurity and on artificial intelligence/machine-learning frameworks, and the Coalition for Health AI’s quality assurance standards for use of AI in the health care and related industries.
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On March 7, 2023, the National Labor Relations Board (NLRB) announced a new information sharing agreement with the Consumer Financial Protection Bureau (CFPB). The agencies executed a memorandum of understanding that will remain in effect indefinitely and permit the sharing of nonpublic information, including information about ongoing investigations. According to the NLRB and CFPB, the agreement will help improve the enforcement of both federal consumer financial protection laws and labor laws, with a heightened focus on employer surveillance and employer-driven debt.
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On March 22, 2023, the General Counsel of the National Labor Relations Board (NLRB or the Board), Jennifer Abruzzo, issued guidance about the Board’s McLaren Macomb decision from earlier this year. The guidance made clear that the General Counsel will, when given the opportunity, prosecute a case before the Board to have the NLRB invalidate provisions in severance agreements that attempt to restrict the rights of departing employees to engage in activity protected by the National Labor Relations Act (NLRA). The General Counsel also emphasized her view of the retroactive application of the decision, noting that employers attempting to enforce old severance agreements will face new unfair labor practice liability even if the statute of limitations has run since the execution of the now-unlawful agreement. Although the General Counsel’s memorandum is not law, employers should pay close attention as the guidance indicates the position the General Counsel will take in prosecuting allegedly unlawful severance agreements.
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The decision of the National Labor Relations Board (the Board) in McLaren Macomb, 372 NLRB No. 58 ( Feb. 21, 2023), reinstates a limit on the confidentiality, non-disclosure, and non-disparagement clauses that employers may include in severance agreements with most of their lower-level employees. While the Board bills its decision as a return to the standard applied in earlier cases, this decision suggests that the Board will take a broader view of how such agreements infringe on employees’ rights under Section 7 of the National Labor Relations Act.
Continue reading “NLRB: Severance Pay Cannot Include Condition to Waive Rights Under NLRA”