07/31/2025: Advice Memo Indicates New GC Won't Pursue Non-Solicitation Clauses
My thoughts.
The case below contains many overlapping reasons for dismissal. The one that is significant for practitioners states that, even in uncomplicated situations involving clear statutory employees, the Acting GC will not pursue a theory that coworker non-solicitation provisions violate the NLRA or a theory that quitting one’s job is protected activity under the NLRA.
These sorts of high-level decisions are impossible to disentangle from the ideological and political views of the Board leadership, whether Democratic or (as in this case) Republican. But I have worked on multiple cases involving coworker non-solicitation provisions and so I do have some strong opinions about how the NLRA should regard them.
As indicated in the summary below, it is true that the Board law does not clearly establish that quitting a job is protected activity. There are cases where some types of quitting are done as part of a broader course of protected activity and thus it too is considered protected activity, but none that just state, unambiguously, that quitting is protected activity. But I think that, so long as someone quits as part of concerted activity (i.e. with the support of another Section 2(3) employee), it should be considered protected activity for the following reasons:
A quit is similar to a strike, a walk out, and similar kinds of work cessation. When workers quit, it creates economic costs for the employer — the cost of replacing the worker — and potentially puts pressure on the employer to improve working conditions so as to reduce the likelihood that other workers quit.
A quit also serves an expressive purpose similar to speaking out internally or publicly about working conditions. In fact, it is a much stronger form of speaking out because, as the saying goes, actions speak louder than words.
A quit is the flip side of permanent replacement. The Supreme Court has allowed employers to permanently replace striking workers on the idea that an employer has “the right to protect and continue [their] business by supplying places left vacant by strikers.” Surely it stands to reason that an employee should have a similar right to cease work in a way that protects and continues their labor market earnings, i.e. ceasing their work to take another job (“quit”) rather than ceasing their work to do nothing (“strike”).
Historically, the Board has not had much reason to declare quits as protected activity because whether they are protected or not does not really matter. If a worker quits, an employer cannot do much to retaliate against them because retaliation generally takes the form of firing someone or worsening their working conditions. But now that restrictive covenants — including coworker non-solicitation clauses, non-compete clauses, and stay-or-pay provisions — have become extremely prevalent in the labor market, employers really can retaliate against workers for quitting by threatening and taking legal action. So the Board has a reason to step in and declare quits as protected activity. It really does matter.
Relatedly, I think that coworker non-solicitation provisions — and any other similar restrictive covenant — should be considered a facial violation of the NLRA because they reasonably chill workers from engaging in the protected activity of quitting. Workers rationally fear litigation, even litigation that they would win, and these clauses essentially operate so as to give employers the ability to dump six figures of costs on any worker who quits, even if that worker wins the lawsuit. This sort of coercion exceeds the usual sorts of coercion the NLRA has concerned itself with, such as the coercion of retaliatory discharges.
Universal Automation and Mechanical Services Inc., 01-CA-300935 (Advice Memo)
This NLRB case-closing email rescinds a previous Advice memorandum and directs dismissal of charges against Universal Automation & Mechanical Services.
Brief Background
HVAC company with collective bargaining agreement with Local 537
Employee negotiated a 2010 compensation agreement with non-solicitation provisions
After resignation in 2022, employer sent cease-and-desist letters alleging customer solicitation
Legal Analysis and Conclusion
Upon reconsideration, the Division of Advice determined:
The Employer would likely establish that in 2010, when the agreement was signed, the individual worked in a managerial capacity and was not part of the bargaining unit. Evidence shows the individual primarily performed management work such as making decisions and supervising others.
As a manager, the individual was not a statutory employee under Board precedent defining managerial employees as "those who formulate and effectuate high-level employer policies" with discretion in representing management interests.
Without statutory employee status, the Employer had no obligation to bargain with the Union over the 2010 compensation agreement terms, therefore no Section 8(a)(1) and (5) violations occurred.
Even assuming the individual was a statutory employee at resignation in 2022, the Employer's enforcement efforts of the lawful non-solicitation of customers provision did not violate the Act.
Since the individual wasn't a statutory employee when entering the agreement, the Employer wasn't seeking to enforce an unlawfully obtained agreement. This distinguishes from precedent addressing "fruits of unfair labor practices."
Regarding the non-solicitation of employees provision, the Board has distinguished between the unprotected act of voluntarily resigning from an employer and the potentially protected conditional threat to resign. This case doesn't present considerations similar to cases where a union steward's efforts to have coworkers apply for other jobs was protected.
The Division directed dismissal of the entire charge, finding insufficient evidence the individual was a statutory employee in the bargaining unit when signing the agreement.
Significant Cases Cited
Republican Co., 361 NLRB 93 (2014) - Defined managerial employees as "those who formulate and effectuate high-level employer policies" with discretion in representing management interests.
National Licorice Co. v. NLRB, 309 U.S. 350 (1940) - Upheld relief releasing employees from contracts negotiated by company-dominated labor organization.
Crescent Wharf and Warehouse Company, 104 NLRB 860 (1953) - Distinguished between the unprotected act of resigning and potentially protected conditional threats to resign.
Technicolor Services, 276 NLRB 383 (1985) - Found union steward's efforts to have coworkers fill out applications for other companies was protected activity.