Are employee non-compete agreements enforceable in North Dakota?
No. North Dakota law makes a contract that restrains a lawful profession, trade, or business to that extent void.
For employees, that is a prohibition, not a reasonableness test. The two statutory exceptions cover sale-of-goodwill and owner dissociation settings; ordinary employment non-competes do not fit either exception. North Dakota cases apply the rule strictly, including to insurance agents and emergency-room physicians. On a touch screen, a tap shows all 2 sources in this group.
That does not make every workplace covenant invalid. A confidentiality clause, trade-secret remedy, or during-employment loyalty claim may stand on different law. But a post-employment covenant that keeps a worker from practicing the same lawful trade is usually void. For a clause-by-clause pass over a specific agreement under these rules, the North Dakota non-compete reviewer checklist walks the surviving covenant suite item by item with each requirement's force level.
Sources for this answer
N.D. Cent. Code § 9-08-06 supplies North Dakota's baseline rule voiding contracts that restrain a lawful profession, trade, or business except for listed statutory exceptions.
A contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, except: 1. A person that sells the goodwill of a business and the person's partners, members, or shareholders may agree with the buyer to refrain from carrying on a similar business within a reasonable geographic area and for a reasonable length of time, if the buyer or any person deriving title to the goodwill from the buyer carries on a like business in that area.
See N.D. Cent. Code § 9-08-06.
Werlinger supports the rule that an employment non-compete against an insurance agent is void under § 9-08-06.
The trial court ruled that Paragraph 12(D) was a restraint of trade, void and unenforceable under § 9-08-06, N.D.C.C.
See Werlinger v. Mut. Serv. Cas. Ins. Co., 496 N.W.2d 26, 27 (N.D. 1993).
Spectrum supports applying § 9-08-06 to physician employment restraints.
There can be no doubt that section 9-08-06, N.D.C.C., makes void the provision which attempts to prohibit the physicians from being employed by the Hospital at the end of the contract period with Spectrum.
See Spectrum Emergency Care, Inc. v. St. Joseph's Hosp. & Health Ctr., 479 N.W.2d 848, 851 (N.D. 1992).
What statutory exceptions permit North Dakota non-competes?
Only two categories are built into § 9-08-06: sale of business goodwill and certain owner dissociation or dissolution covenants .
The first exception lets a person who sells goodwill, together with that person's partners, members, or shareholders, agree with the buyer not to carry on a similar business within reasonable geographic and time limits. The second covers partners, LLC members, and shareholders in dissolution, dissociation, or ownership-sale settings.
A covenant inside an exception is not automatically enforceable. The exception keeps the covenant from the near-total ban only if the transaction is genuinely tied to goodwill or owner separation, and the restraint still must fit the statutory geography and time limits. North Dakota goodwill law also treats goodwill as transferable property and a warranty against drawing off customers. On a touch screen, a tap shows all 2 sources in this group.
A small equity repurchase or a routine employment exit does not qualify as a sale-of-goodwill covenant. Warner held that a sale of 1/200th of the company could not transfer business goodwill as a matter of law, so a covenant leaning on a token equity interest to reach the exception falls back under the general ban .
Sources for this answer
N.D. Cent. Code § 9-08-06 carves out only two exceptions to the business-restraint ban — sale of goodwill and owner dissolution or dissociation — each requiring a reasonable geographic area and a reasonable length of time.
A contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, except: 1. A person that sells the goodwill of a business and the person's partners, members, or shareholders may agree with the buyer to refrain from carrying on a similar business within a reasonable geographic area and for a reasonable length of time, if the buyer or any person deriving title to the goodwill from the buyer carries on a like business in that area. 2. Partners, members, or shareholders, upon or in anticipation of a dissolution of a partnership, limited liability company, or corporation; upon or in anticipation of a dissociation of a partner or member; or as part of an agreement addressing the dissociation or sale of a partner, member, or shareholder's ownership interest, may agree that all or any number of them will not carry on a similar business within a reasonable geographic area where the partnership, limited liability company, or corporation business has been transacted, or within a specified part of the area.
See N.D. Cent. Code § 9-08-06.
N.D. Cent. Code chapter 47-07 defines goodwill, makes it transferable, and attaches a customer non-diversion warranty to a goodwill sale.
The goodwill of a business is property transferable in the same manner as any other.
See N.D. Cent. Code § 47-07-11.
Earthworks supports the rule that the sale-of-goodwill exception validates only limited non-competes connected with goodwill.
The exception relied on here by Earthworks makes valid a limited non-competition agreement only if it is connected with the sale of the goodwill of a business.
See Earthworks, Inc. v. Sehn, 553 N.W.2d 490, 493 (N.D. 1996).
Warner supports scrutinizing whether an equity sale is sufficient to qualify as a sale of goodwill.
We agree with the trial court that, as a matter of law, the sale of a l/200th interest cannot be said to transfer the goodwill of the business.
See Warner & Co. v. Solberg, 2001 ND 156, ¶ 29, 634 N.W.2d 65.
Do North Dakota courts blue-pencil an overbroad non-compete?
Usually no for employee non-competes. Section 9-08-06 makes the restraint to that extent void, so courts strike the invalid restraint rather than save it through a general reasonableness rewrite.
There is an important sale-of-business nuance. Older goodwill cases allowed partial enforcement where the covenant fit the statutory exception but exceeded the permitted territory. Hawkins enforced an overbroad sale-of-business covenant in the one county where the purchased business was located and conducted , and Earthworks approved a trial court's limiting a statewide covenant to a single county . That severability history is not a license to draft an employee non-compete and ask a court to make it reasonable later. On a touch screen, a tap shows all 2 sources in this group.
For an employment covenant, an invalid restraint is struck rather than trimmed to the bounds of reason: North Dakota's main employment cases apply no general blue-pencil rescue to ordinary post-employment non-competes or customer restrictions, so a savings clause inviting a court to rewrite the restraint has no rule to invoke and the overbroad covenant simply falls .
Sources for this answer
N.D. Cent. Code § 9-08-06 uses voiding language rather than a general reasonableness standard for covered restraints.
A contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, except: 1. A person that sells the goodwill of a business and the person's partners, members, or shareholders may agree with the buyer to refrain from carrying on a similar business within a reasonable geographic area and for a reasonable length of time, if the buyer or any person deriving title to the goodwill from the buyer carries on a like business in that area.
See N.D. Cent. Code § 9-08-06.
Earthworks supports partial enforcement of a sale-of-business covenant whose statewide territory exceeded the statute, by confining it to a single county.
This non-competition agreement, in violation of NDCC 9-08-06(1), stated its geographical area to encompass the “state of North Dakota.” With ample precedent, the trial court correctly limited the valid area of the non-competition covenant to Burleigh County.
See Earthworks, Inc. v. Sehn, 553 N.W.2d 490, 494 (N.D. 1996).
Hawkins supports partial enforcement in a sale-of-business setting where an overbroad covenant can be confined to the valid county.
Because the property and business purchased from Saunders and McNea were located and conducted in Ward County, we hold the non-competition agreement to be enforceable in that county.
See Hawkins Chem., Inc. v. McNea, 321 N.W.2d 918, 920 (N.D. 1982).
Warner supports striking customer-replacement restraints in employment agreements as void to that extent.
These limitations constitute a restraint of trade and therefore the agreement is “to that extent void.”
See Warner & Co. v. Solberg, 2001 ND 156, ¶ 24, 634 N.W.2d 65.
Can an out-of-state employer use a choice-of-law or forum-selection clause to enforce a North Dakota non-compete?
No, not when the practical result is enforcement of a non-compete against North Dakota work in violation of North Dakota public policy .
Osborne involved a South Dakota choice-of-law and forum clause in an employment agreement with a North Dakota sales representative. The North Dakota Supreme Court refused to enforce the forum clause because it would let the employer route around § 9-08-06.
North Dakota's jurisdiction-by-agreement statute also gives a court room to refuse a foreign-forum clause when enforcement would be unfair or unreasonable .
For an employee who primarily lives and works in North Dakota, a foreign choice-of-law or forum-selection clause does not survive where its natural result is enforcing a non-compete against North Dakota work: the North Dakota Supreme Court refused to honor exactly that South Dakota clause because it would route around § 9-08-06 . The foreign-forum statute independently lets a North Dakota court decline an exclusive out-of-state forum whose enforcement would be unfair or unreasonable, so an out-of-state law-and-forum pair copied from a national form is measured against a public policy it cannot contract past .
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Osborne supports refusing choice-of-law and forum-selection clauses that would enable enforcement of a non-compete contrary to North Dakota public policy.
Simply put, one may not contract for application of another state’s law or forum if the natural result is to allow enforcement of a non-compete agreement in violation of North Dakota’s longstanding and strong public policy against non-compete agreements.
See Osborne v. Brown & Saenger, Inc., 2017 ND 288, ¶ 16, 904 N.W.2d 34.
N.D. Cent. Code § 28-04.1-03 allows a North Dakota court to decline enforcement of an exclusive foreign-forum agreement when enforcement would be unfair or unreasonable.
If the parties have agreed in writing that an action on a controversy may be brought only in another state and it is brought in a court of this state, the court will dismiss or stay the action, as appropriate, unless: 1. The court is required by statute to entertain the action; 2. The plaintiff cannot secure effective relief in the other state, for reasons other than delay in bringing the action; 3. The other state would be a substantially less convenient place for the trial of the action than this state; 4. The agreement as to the place of the action was obtained by misrepresentation, duress, the abuse of economic power, or other unconscionable means; or 5. It would for some other reason be unfair or unreasonable to enforce the agreement.
See N.D. Cent. Code § 28-04.1-03.
Are customer non-solicitation covenants enforceable in North Dakota?
Usually no. North Dakota treats post-employment customer non-solicitation and customer-replacement clauses as restraints on trade when they restrict the worker's lawful business .
Warner is the key modern case. The employer argued that a narrower customer restriction should survive, but the North Dakota Supreme Court declined to create a judicial exception to the statute. The court separately recognized trade-secret and during-employment loyalty theories, but it did not save post-employment customer non-solicitation clauses as ordinary contract restraints.
A North Dakota customer covenant drafted as a substitute non-compete carries the same exposure as the ban it stands in for: where the real concern is confidential customer information, trade-secret and confidentiality tools reach it, while a post-employment ban on doing business with customers is a restraint the statute voids .
Sources for this answer
Warner supports the rule that post-employment customer solicitation and replacement restrictions are void under § 9-08-06.
The statute contains no exception for the contractual provisions in § 6(a) and (b) of the contract.
See Warner & Co. v. Solberg, 2001 ND 156, ¶ 23, 634 N.W.2d 65.
Warner supports using trade-secret law rather than a judicial exception to § 9-08-06 to protect confidential customer information.
Because of the plain language of the statute, the history of legislation in North Dakota concerning this issue, and because North Dakota has enacted trade-secrets legislation, we decline to do so.
See Warner & Co. v. Solberg, 2001 ND 156, ¶ 18, 634 N.W.2d 65.
Are employee or anti-raiding non-solicits enforceable in North Dakota?
A narrow anti-raiding covenant can be enforceable. Warner upheld the possibility of a clause barring a former agent from soliciting or influencing another employee to leave for the new agency .
That answer is narrower than it sounds. The clause in Warner targeted solicitation or influence of employees, not competition for customers. Pruco read the Warner holding the same way but denied preliminary relief on the facts, emphasizing the lack of clear solicitation evidence .
North Dakota also recognizes a separate duty during employment. An employee may prepare to leave, but cannot secretly solicit the employer's clients or business for the employee's own account while still employed .
An employee non-solicitation covenant clears § 9-08-06 only in the narrow anti-raiding shape the North Dakota Supreme Court left standing: one that penalizes soliciting or influencing an employee to leave, reaches only colleagues the departing worker actually worked with, and leaves the worker free to compete . A version that bars hiring without solicitation, sweeps in the whole workforce, or shades into competing for customers loses that shelter and falls back into the void rule as a restraint of trade. The shelter is also only as strong as the proof: even a lawful anti-raiding clause yields no injunction on a record devoid of competent evidence of actual solicitation .
Sources for this answer
Warner supports that a narrowly drawn employee non-solicitation covenant is not void under § 9-08-06, though enforcement still depends on ordinary proof and remedies.
This prohibition is narrowly drawn to penalize only Solberg’s actions of soliciting or influencing an employee to leave Warner and come to work for Vaaler and is not void as a restraint of trade.
See Warner & Co. v. Solberg, 2001 ND 156, ¶ 25, 634 N.W.2d 65.
Pruco reads Warner as holding that a provision barring a former agent from soliciting or influencing an employee to leave for a new agency is not void as a restraint of trade.
However, the North Dakota Supreme Court in Warner and Co. v. Solberg, 634 N.W.2d 65, 73 (N.D.2001), held that a provision which prohibits a former insurance agent from soliciting or influencing an employee to leave and come to work for him at a new insurance agency was not void as a restraint of trade.
See Pruco Sec. Corp. v. Montgomery, 264 F. Supp. 2d 862, 869 (D.N.D. 2003).
Pruco supports requiring proof of solicitation before enforcing anti-raiding restrictions by injunction.
Simply stated, the record at this stage is devoid of any competent evidence that Montgomery improperly solicited Prudential agents to follow him to Minnesota Life.
See Pruco Sec. Corp. v. Montgomery, 264 F. Supp. 2d 862, 868 (D.N.D. 2003).
Biever supports equitable relief for secret solicitation of an employer's clients while still employed.
We believe the above provision clearly sets forth what the firm had a right to expect from Coutts, i. e., that he would not solicit clients of the firm for himself while he was employed by the firm.
See Biever, Drees & Nordell v. Coutts, 305 N.W.2d 33, 36 (N.D. 1981).
Are forfeiture-for-competition clauses enforceable in North Dakota?
No, if the forfeiture operates as an indirect restraint on lawful post-employment competition. Werlinger rejected the idea that a worker can be made to buy the freedom to compete .
The rule matters for bonus, deferred compensation, termination pay, and liquidated-damages drafting. North Dakota looks at practical restraint, not only whether the clause expressly forbids the work. If the clause imposes a penalty for competing after employment, it is vulnerable under § 9-08-06 .
Sources for this answer
Werlinger supports the rule that a restraint need not be absolute to be void under § 9-08-06.
Surely this was not freedom to practice his profession in Grand Forks, since he would have to purchase the freedom with $2,000, and there is no merit to this contention.
See Werlinger v. Mut. Serv. Cas. Ins. Co., 496 N.W.2d 26, 29 (N.D. 1993).
Earthworks supports treating post-employment competitor bans and competition penalties as invalid under § 9-08-06 outside an exception.
The statute represents one of the oldest and most continuous applications of public policy in contract law, and it invalidates provisions in employment contracts prohibiting an employee from working for a competitor after completion of his employment or imposing a penalty if he does so.
See Earthworks, Inc. v. Sehn, 553 N.W.2d 490, 493 (N.D. 1996).
How are physician and healthcare non-competes treated in North Dakota?
Section 9-08-06 applies to physician and healthcare restraints. Spectrum voided restraints that blocked physicians from future hospital employment and contracting .
North Dakota does not need a separate physician non-compete ban to reach that result. The general statute protects a physician's ability to exercise a lawful profession. Spectrum also protected negotiation and contracting for future employment while the current agreement was still running, so long as the conduct did not cross into unfair competition or breach of loyalty.
Section 43-17-42 supplies healthcare employment context: hospitals, nonprofits, and charitable trusts may employ physicians by written contract, but the contract must preserve independent medical judgment .
Sources for this answer
Spectrum supports applying § 9-08-06 to protect physicians' future employment negotiations and contracts.
The ability to negotiate and contract for future employment is central to one's ability to exercise a lawful profession, trade, or business.
See Spectrum Emergency Care, Inc. v. St. Joseph's Hosp. & Health Ctr., 479 N.W.2d 848, 851 (N.D. 1992).
N.D. Cent. Code § 43-17-42 permits certain hospital and nonprofit physician employment contracts while preserving independent medical judgment.
The written contract must contain language to the effect the employment relationship with the physician may not affect the exercise of the physician's independent judgment in the practice of medicine, and the physician's independent judgment in the practice of medicine is in fact unaffected by the physician's employment relationship with the hospital, nonprofit entity, or charitable trust.
See N.D. Cent. Code § 43-17-42.
How did the 2019 amendment change North Dakota non-compete law?
The current statute frames both exceptions around a reasonable geographic area and a reasonable length of time, and expressly covers partners, members, and shareholders in goodwill sales and in owner dissolution or dissociation .
The core employee rule did not become a balancing test. The opening clause still voids contracts that restrain a lawful profession, trade, or business except for the listed categories. The current text now expressly refers to partners, members, and shareholders in the sale-of-goodwill exception, and to partnership, limited liability company, and corporation dissolution or dissociation settings in the owner-separation exception.
Reasonable geography and time now matter inside the statutory exceptions. They do not create a general safe harbor for employee non-competes outside those exceptions .
Sources for this answer
Current N.D. Cent. Code § 9-08-06 frames both exceptions — sale of goodwill and owner dissolution or dissociation — around a reasonable geographic area and a reasonable length of time, and expressly names partners, members, and shareholders.
A contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, except: 1. A person that sells the goodwill of a business and the person's partners, members, or shareholders may agree with the buyer to refrain from carrying on a similar business within a reasonable geographic area and for a reasonable length of time, if the buyer or any person deriving title to the goodwill from the buyer carries on a like business in that area. 2. Partners, members, or shareholders, upon or in anticipation of a dissolution of a partnership, limited liability company, or corporation; upon or in anticipation of a dissociation of a partner or member; or as part of an agreement addressing the dissociation or sale of a partner, member, or shareholder's ownership interest, may agree that all or any number of them will not carry on a similar business within a reasonable geographic area where the partnership, limited liability company, or corporation business has been transacted, or within a specified part of the area.
See N.D. Cent. Code § 9-08-06.
What alternatives do North Dakota employers have?
Employers should use trade-secret, confidentiality, invention-assignment, return-of-property, and during-employment loyalty tools instead of post-employment competition bans .
North Dakota's Uniform Trade Secrets Act allows injunctions against actual or threatened misappropriation and damages for misappropriation. That is often the cleaner path when the real risk is misuse of customer lists, pricing, formulas, processes, or other protected information. On a touch screen, a tap shows all 2 sources in this group.
Employers also can enforce ordinary loyalty duties while employment continues. Section 34-02-14 requires an employee transacting similar business on the employee's own account to prefer the employer's business .
In a ban state, a North Dakota employer's post-employment protection runs through trade-secret and misappropriation remedies and during-employment loyalty duties, not a covenant against competition. On a touch screen, a tap shows all 2 sources in this group. A confidentiality, return-of-property, or invention-assignment clause holds only while it targets misuse of protected information or disloyal conduct; construed to bar ordinary work for a competitor or ordinary dealing with customers, it inherits the void rule of § 9-08-06 rather than the trade-secret safe ground, and gains nothing the misappropriation remedy did not already supply.
Sources for this answer
North Dakota's Uniform Trade Secrets Act authorizes injunctions for actual or threatened misappropriation.
Actual or threatened misappropriation may be enjoined.
See N.D. Cent. Code § 47-25.1-02(1).
North Dakota's Uniform Trade Secrets Act defines trade secret by economic value from secrecy and reasonable efforts to maintain secrecy.
4. "Trade secret" means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: a. Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and b. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
See N.D. Cent. Code § 47-25.1-01(4).
North Dakota's Uniform Trade Secrets Act authorizes damages for misappropriation, including actual loss and unjust enrichment.
Damages can include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss.
See N.D. Cent. Code § 47-25.1-03(1).
N.D. Cent. Code § 34-02-14 supplies a during-employment duty to prefer the employer's business in similar affairs.
An employee who has any business to transact on the employee's own account similar to that entrusted to the employee by the employee's employer shall give the latter the preference always.
See N.D. Cent. Code § 34-02-14.
What does federal law require a non-compete or confidentiality agreement in North Dakota to say about whistleblowers and pay?
An employee confidentiality, non-compete, or invention assignment agreement signed or updated now that governs trade secrets or other confidential information must give the Defend Trade Secrets Act whistleblower-immunity notice, and for employees the National Labor Relations Act covers, Section 7 of that Act protects concerted activity, including joining together over pay and working conditions, that a broad confidentiality clause can restrict. The employer may satisfy the notice duty by cross-referencing a qualifying policy document provided to the employee, but an employer that omits the notice may not be awarded exemplary damages or attorney fees under the Defend Trade Secrets Act in an action against an employee who was not given notice.
The notice describes a federal immunity: an individual cannot be held liable under federal or state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal. For an agreement signed or updated now, the duty to give that notice reaches any agreement with an employee that governs trade secrets or other confidential information, whatever else the agreement does.
Section 7 gives employees the National Labor Relations Act covers a statutory right to engage in concerted activity for mutual aid or protection, including joining together to improve pay and working conditions. For employees the Act covers, the Board's work-rule standard adopted in 2023 makes a rule presumptively unlawful if it has a reasonable tendency to chill employees from exercising their Section 7 rights; an employer can rebut that presumption only by showing a legitimate and substantial business interest it cannot serve with a more narrowly tailored rule. The 2023 standard may change, but the Section 7 right it enforces is statutory. State law may add its own requirements for the same clauses.
A form carried over without the immunity notice, or a cross-reference to a reporting policy the employee never received, leaves the confidentiality clause without a valid notice, so the Act's exemplary damages and attorney fees are unavailable against that employee. A Confidential Information definition that sweeps in pay and working conditions with no carve-out exposes the employer to an unfair-labor-practice finding for employees the Act covers.
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An individual is immune from criminal and civil liability under federal and state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal.
An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that— (A) is made— (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
See 18 U.S.C. § 1833(b)(1).
An employer must give notice of the trade-secret whistleblower immunity in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
An employer shall provide notice of the immunity set forth in this subsection in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
See 18 U.S.C. § 1833(b)(3)(A).
An employer complies with the notice requirement by cross-referencing a policy document, provided to the employee, that sets out the employer's reporting policy for a suspected violation of law.
An employer shall be considered to be in compliance with the notice requirement in subparagraph (A) if the employer provides a cross-reference to a policy document provided to the employee that sets forth the employer's reporting policy for a suspected violation of law.
See 18 U.S.C. § 1833(b)(3)(B).
An employer that does not give the required notice may not be awarded exemplary damages or attorney fees in a trade-secret action against an employee who did not receive it.
If an employer does not comply with the notice requirement in subparagraph (A), the employer may not be awarded exemplary damages or attorney fees under subparagraph (C) or (D) of section 1836(b)(3) in an action against an employee to whom notice was not provided.
See 18 U.S.C. § 1833(b)(3)(C).
Section 7 gives employees the right to engage in concerted activities for mutual aid or protection, the statutory basis for keeping discussion of pay and working conditions outside confidentiality restrictions.
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title.
See 29 U.S.C. § 157 (NLRA § 7).
The National Labor Relations Board protects the right of private-sector employees, with or without a union, to join together to improve wages, benefits, and working conditions.
Established in 1935, the National Labor Relations Board is an independent federal agency that protects employees from unfair labor practices and protects the right of private sector employees to join together, with or without a union, to improve wages, benefits and working conditions.
See NLRB Office of Public Affairs, news release of Feb. 21, 2023 (agency mission statement).
Under the work-rule standard the Board adopted in 2023, a rule with a reasonable tendency to chill employees from exercising their Section 7 rights is presumptively unlawful unless the employer proves a legitimate and substantial business interest it cannot advance with a more narrowly tailored rule.
Under the new standard adopted in Stericycle, the General Counsel must prove that a challenged rule has a reasonable tendency to chill employees from exercising their rights. If the General Counsel does so, then the rule is presumptively unlawful. However, the employer may rebut the presumption by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule.
See Stericycle, Inc., 372 NLRB No. 113 (2023); NLRB Office of Public Affairs, Board Adopts New Standard for Assessing Lawfulness of Work Rules (Aug. 2, 2023).