Employer Non-compete Clauses Are Likely Illegal, Per NLRB: Kiplinger Economic Forecasts
The general counsel for the National Labor Relations Board made the case against non-compete clauses in a recent memo.


Amidst a period of low unemployment rates and a recovering jobs market, there is a renewed focus on employee rights in the workplace. To help you understand what is going on and what we expect to happen in the future, our highly-experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest...
Non-compete clauses may violate federal labor law, except in limited cases, according to a recent memo by Jennifer Abruzzo, general counsel of the National Labor Relations Board. Such pacts are likely illegal if workers could view them as hindering their ability to quit and/or switch jobs, and thus their ability to organize with others and collectively bargain. The memo sets the stage for a possible NLRB ruling on the issue, with Abruzzo directing regional Labor Department officials to submit any cases that involve arguably illegal noncompete agreements to the general counsel’s office. It also strengthens the Biden administration’s regulatory overlap between the NLRB and Federal Trade Commission (FTC), which proposed a rule in January 2023 to ban non-compete clauses. The two agencies are collaborating in their efforts.
Roughly one in five Americans is bound by a non-compete agreement. But they are more prevalent in certain industries, most notably, the tech sector, where 35%-45% of workers are subject to the restrictions of non-compete clauses, possibly preventing workers from taking certain jobs after leaving a current employer.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
Read more
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

-
Ten Cheapest Places to Live in Texas
Property Tax Looking for a cheap place to live in Texas? Look no further. These counties have the lowest property tax bills in the Lone Star State.
-
AI Is Missing the Wisdom of Older Adults: What It Means for You
AI will increasingly affect your healthcare and finances, but young workers are primarily designing the systems and getting most of the jobs.
-
Tax Rule Change Could See Millions Lose Health Insurance
The Kiplinger Tax Letter If current rules for the health premium tax credit (PTC), a popular Obamacare subsidy, aren't extended, 3.7 million people could lose their health insurance.
-
Travel Trends You Can Expect This Summer
The Kiplinger Letter Domestic trips will trump foreign travel amid economic uncertainties, though some costs are down.
-
AI Goes To School
The Kiplinger Letter Artificial intelligence is rapidly heading to K-12 classrooms nationwide. Expect tech companies to cash in on the fast-emerging trend.
-
What To Know if You’re in the Market for a New Car This Year
The Kiplinger Letter Buying a new car will get a little easier, but don’t expect many deals.
-
Universal Savings Accounts Are Like Roth IRAs, But With a Twist
The Tax Letter Republican lawmakers and conservative think tanks are proposing a new type of tax-advantaged savings account. Think Roth IRAs, but not just for retirement.
-
Will Lower Mortgage Rates Bring Relief to the Housing Market?
The Kiplinger Letter As mortgage rates slowly come down here's what to expect in the housing market over the next year or so.
-
Car Prices Are Finally Coming Down
The Kiplinger Letter For the first time in years, it may be possible to snag a good deal on a new car.
-
New Graduates Navigate a Challenging Labor Market
The Kiplinger Letter Things are getting tough for new graduates. Job offers are drying up and the jobless rate is increasing. Are internships the answer?