NLRB Issues First Unfair Labor Practice Complaint against Non-Competes and Training Repayment

The General Counsel of the National Labor Relations Board (NLRB), former union lawyer Jennifer Abruzzo, continues to attempt to expand the application of the Labor Act to cover everyday employment policies.  The latest attack comes through an unfair labor practice complaint issued against a spa alleging it illegally made workers sign various contracts, including non-compete and training repayment agreements.  The complaint was filed on September 1, 2023 against Juvly Aesthetics, Case No. 09-CA-300239.  The non-compete prohibited workers from performing certain services within a 20-mile radius of any company locations for two years after leaving their jobs.  

The NLRB complaint also claims the spa violated the Labor Act through a training repayment program in which employers try to make workers repay job training if they quit.  The repayment provision would require workers to pay back certain training costs if they leave within a year of starting, and at prorated rates over the course of the second year.  The Cincinnati NLRB Office announced that "provisions like these, that in practice cut off employees' ability to leave their job, interfere with the employees' exercising of their rights under Section 7 of the National Labor Relations Act."

The NLRB judges themselves and the full Board in Washington have yet to accept the validity of these novel theories, but it is concerning to many employers that charges and complaints are being issued on these common company policies, particularly pertaining to non-competes. 

This article is part of our March 2024 Newsletter. 

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