It has always been clear that non-compete agreements between an employer and its bargaining unit employees are a mandatory subject of bargaining, but it has never been clear that the same is true for agreements between an employer and a third-party limiting the third-party’s ability to hire the employer’s unionized employees. However, employers finally received some (non-binding) clarity in the form of an Advice Memorandum from the National Labor Relations Board’s Office of the General Counsel, in which the Division of Advice concluded that an employer has no obligation to bargain over its decision to include limitations on its third-party contractors’ ability to hire and use former unit employees.
In Duke Energy Indiana (Case 25-CA-214176), the union represented the employer’s linemen who constructed and maintained the employer’s power lines and other equipment. The employer also used subcontracted linemen consistent with the terms of the parties’ collective bargaining agreement, and the union represented many of the linemen working for the subcontractors. However, many of the employer’s linemen found that working for the subcontractors through the union’s hiring hall offered better wages and benefits, and thus terminated their employment and began working through the hiring hall for the subcontractors. Looking to stem the tide of linemen leaving, the employer began enforcing contractual provisions in the agreements with its subcontractors prohibiting them from soliciting the employer’s linemen. In response the union filed an unfair labor practice charge alleging that the employer had an obligation to bargain over the implementation and enforcement of the non-solicitation provision in the agreements with the subcontractors.