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Writer's pictureBy The Financial District

NLRB Judge Says IT Firm's Noncompete Agreement Is Legal

A National Labor Relations Board (NLRB) administrative judge has ruled that IT services provider NTT Data did not violate employees' rights under federal labor law by requiring them to sign agreements prohibiting them from competing with the company or poaching coworkers and clients, Daniel Wiessner reported for Reuters.


The NLRB argued initially that most noncompete agreements violate workers' rights to organize. I Photo: Japan-Spain Business Circle (CEJE)



The ruling by Administrative Law Judge G. Rebekah Ramirez in Detroit diverges from a decision by a judge in another case, who stated in the first ruling of its kind in June that a similar agreement imposed by an HVAC company violated the National Labor Relations Act.


The five-member NLRB is reviewing that decision.



NLRB General Counsel Jennifer Abruzzo, whose office prosecutes cases involving alleged unlawful labor practices, first argued last year that most noncompete agreements violate workers' rights to organize and advocate for better working conditions.


About 20% of US workers, or 30 million people, have signed noncompetes, according to the US Federal Trade Commission (FTC), which passed a rule this year banning the agreements nationwide.



However, a federal judge in Texas blocked the rule from taking effect in August.


According to filings in the case, NTT required employees who were laid off to sign a severance agreement that prohibited them from performing the same services for NTT's customers, soliciting other employees to quit, or encouraging the company's clients to terminate their relationship with NTT for one year after their termination.




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