In an advice memorandum, the Office of the General Counsel of the National Labor Relations Board (NLRB) demonstrated that it continues to consider the issue of protected concerted activity to be at the forefront and that it is willing to strike down provisions of an employment agreement that can be reasonably interpreted to chill employees' right to engage in collective action. In Thermal Tech, Inc., Case No. 19-CA-068292 (December 3, 2012), the Associate General Counsel considered whether the moonlighting and noncompete provisions of an employer's mandatory employment agreement violated employees' Section 7 rights.
The moonlighting clause banned employees from gaining outside employment during the term of the employment agreement with Thermal Tech, Inc. (Thermal Tech) without the employer's prior written consent. The Associate General Counsel determined that, on its face, the "dual employment policy" did not violate the National Labor Relations Act (NLRA). The Associate General Counsel also determined that the clause was lawful because it did not outright prohibit salting - a labor union tactic for individuals to obtain a job with an employer with the intent of organizing a union at the site.
However, this ban would violate the NLRA if the employer had an unlawful motive and it was discriminatorily applied. Therefore, the Associate General Counsel directed the NLRB regional director to investigate whether the employer acted with anti-union animus.
The employment agreement prohibited employees, while employed with Thermal Tech and for two years after termination of employment, from being employed by any refrigeration or industrial insulation contractor in Washington, Oregon or Idaho without Thermal Tech's written consent.
The Associate General Counsel determined that the noncompete provision did not violate the NLRA because "Section 7 does not confer a right to work in a particular geographic region." The Associate General Counsel held that the possibility that the restrictions on employment would interfere with Section 7 rights, such as by preventing employees from becoming union salts in a particular geographic area after employment with Thermal Tech ends, is too remote to establish an NLRA violation.
The Associate General Counsel did note, however, that this provision, which interferes with employment in general rather than with Section 7 of the NLRA, may be unlawful under state law.
Advice for Employers
Although the employer was successful in this case, this decision should still serve as a reminder to employers to review and revise employment agreements as well as any workplace policies and practices or clauses in employee handbooks that could be reasonably interpreted to infringe upon employees' Section 7 rights. The NLRB continues to stress that it will find agreements and policies regarding a wide variety of topics from moonlighting and confidential investigations to social media and employee communications overbroad and invalid if the provisions interfere with the right to engage in protected concerted activity.
Outside Employment Policy
Employee Management > Employee Handbooks - Work Rules - Employee Conduct > Moonlighting and Outside Employment
Employment Contract Form
Noncompete Agreement Form
NLRB Still Dishing About Social Media and Other Workplace Policies