The NLRB prepares to reverse course on key issues
Over the past few years, articles in this Resources section have covered key changes in labor law and NLRB positions. This article will update our prior articles as the current Board pursues a more management-friendly approach to federal labor law.
Issues will be discussed in the order that they were published in Resources to enable the reader to more easily cross-reference this blog with the previous ones on the same subject.
Severance and non-compete agreements. In 2023, NLRB General Counsel Jennifer Abruzzo issued memos (GC 23-05 and 23-08) to all NLRB field offices advising that severance agreements and non-compete agreements would be deemed to violate the Act when they include broad confidentiality, non-disparagement, or non-competition provisions.
In 2025, Acting General Counsel William B. Cowen rescinded 31 Biden-era general counsel memoranda (GC 25-05), including GC-23-05 and GC-23-08. This signals a “softening” of the Board’s scrutiny of severance and non-compete agreements, although the Board has not provided specifics.
An FTC rule limiting non-compete agreements was abandoned by the FTC after a federal district court found it invalid and issued a nation-wide injunction in 2024.
The Cemex case (372 NLRB 130 (2023)). This case makes organizing potentially easier and faster. If a majority of employees sign cards, the employer under Cemex can’t just sit back – it must file for an election within two weeks, or the Board will unilaterally impose a bargaining order. And if the employer commits a ULP during the run-up to an election, the Board may issue a bargaining order in lieu of the election. Federal courts of appeals have reached conflicting results in applying Cemex, but it remains Board law at this time. However, it is widely anticipated that the Board will seek modification of Cemex requirements when the right case comes up for agency or judicial review.
Stericycle, Inc. (372 NLRB No. 113 (2023)). This case created a new test for determining the legality of employee handbooks, invalidating any provision that “could” cause an employee to refrain from exercising NLRB Section 7 rights by filing grievances, organizing, pursuing ULPs, or working together in areas of wages, hours and other conditions of employment. The employer can retain its handbook provisions only if it proves that the provisions are narrowly drawn and protect a legitimate and substantial business interest – a high bar to cross. Stericycle is still the law. But we can expect that, presented a case on point, the Board will reverse Stericycle and return to the more employer-friendly approach in the 2017 Boeing Company standard that rendered most handbook provisions automatically legal.
The Joint Employer rule. This year, the Board reinstated the 2020 employer-friendly joint employer rule that required proof of direct control over conditions of employment before a company is deemed to be a joint employer with another entity. The 2023 iteration of the rule created more risk for employers by deeming two or more employers as joint if an employer simply could be deemed to exercise control over conditions of employment. Courts threw out the 2023 rule ahead of the current Board’s return to the 2020 definition (see Resources, A federal court vacates the NLRB’s new 2023 joint employer rule).
NLRA Section 7, “protected concerted activity” definition. In August of 2023, the Board in Miller Plastic Products ruled that a single employee can invoke the PCA protections of the Act if acting on behalf of other employees. Under past Board and court guidance, an act qualified as PCA only if two or more employees were engaged in the activity. The case was affirmed on appeal and remains open. It appears that Miller Plastic Products is still the law, with no indications from the Board on any future approach.
There are many other issues that the Board will address as it carries its new Republican majority forward, including the issue of potentially expanded remedies for NLRA violations that were proposed by the prior Board’s general counsel. The current Board has signaled that it will support traditional remedies for violations of the NLRA of a make-whole nature and not look for collateral or esoteric remedies that might be tacked on to violations.
This blog covers only those issues we previously covered in the Resources section.
Needless to say, expert legal counsel and management training are an employer’s best bets to mitigate risk in the complicated field of labor law. A well-trained, up-to-date management team can avoid legal pitfalls while it builds trust and respect by consistent, compliant means.
Call Gary Kleckner, MARC Vice President: 216-973-7323 and see how MARC can help identify and satisfy your interests in a strong and engaged workforce.