In a recent Advice Memorandum issued in Star Crane & Hoist, the National Labor Relations Board (“NLRB”) concluded that a customer non-solicitation clause included in a former employee’s separation agreement did not violate Section 8(a)(1) of the National Labor Relations Act (“NLRA”). This memo offers a glimpse into the shifting enforcement priorities under the current administration, and provides practical insight into how the Board is now likely to approach post-employment restrictive covenants.
The case centered on a former commission-based crane sales employee who resigned from Star Crane & Hoist to take a position with a competitor, CISG. Upon his exit, the employee signed a separation agreement that prohibited him from soliciting Star Crane’s current customers and required him to refer any customer inquiries back to the company. Despite agreeing to those terms, the employee later sent a mass email to 49 contacts at customer companies, informing them that Star Crane had raised its prices and that his new employer, CISG, could offer significant savings.
In response, Star Crane issued a cease-and-desist letter, accusing the employee of breaching the agreement and tortiously interfering with customer relationships. Star Crane demanded assurances from CISG that the employee would cease competing and would not disclose confidential information. Negotiations between the companies failed, and CISG ultimately terminated the employee, stating that it could not afford to continue paying both the employee’s salary and the legal fees associated with the dispute.
The key legal issue was whether the customer non-solicitation provision in the separation agreement violated Section 8(a)(1) by unlawfully interfering with the employee’s rights under Section 7 of the NLRA. Under previous guidance, particularly GC Memorandum 23-08 issued by then-General Counsel Jennifer Abruzzo, non-compete and non-solicitation agreements were viewed with skepticism. The old memo emphasized that such provisions could impermissibly “chill” employees from exercising their Section 7 rights, including the right to seek new employment, resign, or engage in concerted activity.
However, the Division of Advice in this case took a more measured approach. It concluded the non-solicitation clause did not violate the Act. The employee had successfully obtained a new job in the crane industry without any initial objection from Star Crane, and the company only took action after the mass email solicitation. Notably, Star Crane did not demand the employee’s termination or take any steps that would indicate a desire to limit the employee’s general employment opportunities. Its concerns were narrowly focused on the use of proprietary information to solicit existing customers.
The Division further concluded that the provision itself was limited in scope, applying only to current customers, and restricting only solicitation, not employment in the industry. Although the agreement included an indefinite referral requirement, which could raise concerns, the Advice Division found no evidence that the industry was so small that the clause effectively barred the employee from finding work. Further, there was no evidence that the clause itself, as opposed to the employee’s own conduct or the resulting litigation, caused his subsequent termination.
This memo reflects a clear shift away from the aggressive posture previously adopted by the NLRB under the Biden-era general counsel. In February 2025, the current Acting General Counsel rescinded several enforcement memoranda from the prior administration, including those addressing non-competition and non-solicitation provisions. That policy reversal signaled a return to evaluating such restrictions on a case-by-case basis, giving more weight to employer interests in protecting customer relationships.
The Star Crane memo indicates that the current NLRB is now more willing to credit legitimate business justifications for narrowly tailored post-employment restrictions, particularly when they do not categorically prevent employees from working in their field. While overly broad or punitive non-solicitation agreements may still raise red flags, employers that craft these provisions carefully, limiting them in scope, duration, and application, are more likely to withstand legal scrutiny under Section 8(a)(1).
For employers, this decision offers some reassurances that not all post-employment restrictions are per se unlawful under the NLRA. It underscores the importance of tailoring such clauses narrowly and ensuring they protect legitimate business interests rather than impose broad restraints on worker mobility. Ultimately, Star Crane & Hoist marks a notable moment in the continuing evolution of labor policy, reflecting how changes in political leadership at the NLRB can reshape enforcement strategies.
Brody and Associates regularly advises its management clients on all labor management issues, including union-related matters, and provides union-free training and strategic guidance. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.
