NLRB Scrutiny of Restrictive Covenants, NDAs, and Non-Disparagement Provisions: Recent Developments and Best Practices
Remaining Compliant While Protecting Company Trade Secrets and Confidential Information
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Employment and Workers Comp
- event Date
Wednesday, August 30, 2023
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE webinar will address recent NLRB activity targeting confidentiality, non-disparagement, and noncompete provisions in employment and severance agreements and the impact on employers. The panelists will discuss considerations for counsel and their clients when determining whether to use restrictive covenants and best practices to minimize the risk of committing an unfair labor practice (ULP).
Mr. Beck is a business, trade secrets, and employee mobility litigator, nationally recognized for his trade secrets and noncompete experience. A leading authority on the law of trade secrets, noncompetes, and employee mobility, he literally wrote the law, wrote the book, and teaches the course on noncompete law in Massachusetts. Similarly, Mr. Beck revised the Massachusetts Uniform Trade Secrets Act, wrote the books Trade Secrets Law for the Massachusetts Practitioner (1st ed. MCLE 2019) and Negotiating, Drafting, and Enforcing Noncompetition Agreements and Related Restrictive Covenants (6th ed., MCLE, Inc. 2021), teaches the course Trade Secrets and Restrictive Covenants at Boston University School of Law, and co-hosts a podcast on trade secrets and restrictive covenants called Fairly Competing.
Mr. Bindra focuses his practice on employment and executive agreements, noncompete, non-solicit and trade secret disputes, business consulting, executive career counseling, appeals, whistleblower claims, employment arbitration agreements, unpaid wages, and employment discrimination. He has extensive experience working with executives physicians, and corporations. Mr. Bindra was also one of the lead architects and drafters of an amendment to the Illinois Freedom to Work Act that significantly reformed how noncompete and non-solicit agreements are litigated in the state of Illinois. He testified in support of the law and helped bring together a bipartisan coalition of support. As a result, the amendment passed with unanimous support in the Illinois legislature in 2021.
Mr. Chun is a seasoned litigator with experience handling a wide range of complex commercial, restrictive covenant, trade secret, and real estate litigation matters. His clients include private equity and hedge funds, startups, C-suite executives, technology and healthcare companies, insurance companies and brokers, and other corporate clients. Mr Chun has extensive experience counseling and litigating issues related to employee mobility and protecting trade secrets, including breach of restrictive covenants, corporate raiding, and clawback claims. He litigates misappropriation and non-compete cases on behalf of both employers and executives.
Recent events demonstrate the NLRB's increased scrutiny of the use of confidentiality, non-disparagement, and noncompete provisions in employment and severance agreements. The NLRB and its General Counsel have asserted that these provisions may violate employees' Section 7 rights by chilling concerted activity and should not be used except in limited circumstances. Union and non-union employers are affected.
In the McLaren Macomb decision issued on Feb. 21, 2023, the Board targeted the use of confidentiality and non-disparagement clauses in severance agreements unless they are narrowly tailored and have legitimate business justifications. The Board indicated that proffering a severance agreement with overly broad provisions, even without attempting to enforce it, could constitute a ULP.
Additionally, the NLRB's General Counsel released a guidance memo on May 30, 2023, describing how the use of noncompete provisions may also violate the NLRA. The General Counsel indicated that employers may face penalties for violations including inter-agency referrals where unlawful noncompete provisions may also violate other federal laws; and the use of the make-whole remedy where appropriate.
Listen as our expert panel discusses how companies and their counsel should weigh the risks of using restrictive covenants against the need to protect trade secrets and confidential information. The panelists will also describe best practices for remaining compliant and avoiding a ULP.
- NLRB's McLaren Macomb decision
- General Counsel's noncompete guidance memo
- The future of other restrictive covenant provisions such as non-solicitation clauses
- Weighing the risks and benefits of using restrictive covenants
- Possible consequences of noncompliance
- Inter-agency referrals
- Make-whole remedy
- Best practices for compliance
- Determining when and with whom to use restrictive covenants
- Reviewing current and former agreements
- Drafting compliant restrictive covenant provisions
The panel will address these and other key issues:
- When is the use of restrictive covenants in employment and/or severance agreements appropriate?
- What risks and benefits should counsel and their clients consider when determining whether to use restrictive covenants?
- What are the possible consequences and penalties if an employer is found to have committed a ULP by using overly broad restrictive covenants?
- Should companies continue to use other restrictive covenant provisions not yet directly targeted by the NLRB such as non-solicitation clauses?
- What are best practices for remaining compliant while also protecting company confidential information and trade secrets?
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