Region 25-Indianapolis Wins Administrative Law Judge Decision Requiring Indiana HVAC Company to Rescind Unlawful Noncompete & Solicitation Clauses and Reinstate Unlawfully Terminated Union Organizer

On Thursday, June 13, NLRB Administrative Law Judge Sarah Karpinen ruled that J.O. Mory, Inc., an HVAC company located in Indiana, violated the National Labor Relations Act by maintaining unlawful noncompete and solicitation policies. Judge Karpinen also found that the employer unlawfully terminated an employee for engaging in union activity protected under the National Labor Relations Act. She also ruled that the employer maintained an unlawful “Union Free Statement” in a handbook that employees were forced to sign as a condition of employment. 

Applying the standard for work rules the Board returned to in Stericycle, Judge Karpinen found that the employer’s non-compete and solicitation provisions were overly broad and unlawful. The Judge explained that the non-compete agreement would cause a reasonable employee to refrain from engaging in protected activities because if an employee knows they are barred from being involved with a company that operates a similar business to the employer, they will be more fearful of being fired and less willing to rock the boat, as they face the prospect of being unable to find any work in their geographic area if they are fired or forced to leave their job. The provisions prohibiting employees from soliciting their co-workers to leave the employer and requiring that employees disclose solicitations to the employer also interfere with protected activities, like telling co-workers about union benefits, participating in and recruiting others to work at another employer in an effort to unionize, and making concerted threats to quit. 

Judge Karpinen ordered the employer to cease and desist from unlawful activity, offer reinstatement to the unlawfully terminated employee, and make him whole for any loss of earnings and financial harms he suffered. The judge also ordered J.O. Mory to rescind its unlawful handbook provisions, post a notice to employees in its Fort Wayne and South Milford locations, and mail a copy of the notice to all current and former employees employed since August 3, 2022. 

“I am proud of the dedicated investigation and litigation teams who advanced the case forward and achieved this important step in protecting workers’ rights,” said Region 25 Regional Director Patricia Nachand. “If any worker thinks their employer has an unlawful employment agreement provision, they should contact their closest Regional Office.”

In May of 2023, General Counsel Abruzzo sent a memo to all field offices explaining her position that overbroad non-compete agreements are unlawful because they chill employees from exercising their rights under Section 7 of the National Labor Relations Act, which protects employees’ rights to take collective action to improve their working conditions. 

The Agency has entered into memoranda of understanding with the Federal Trade Commission and the Department of Justice’s Antitrust Division, both of which have addressed the anticompetitive effects of non-compete agreements.

Established in 1935, the National Labor Relations Board is an independent federal agency that protects employees, employers, and unions 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. The NLRB conducts hundreds of workplace elections and investigates thousands of unfair labor practice charges each year. Region 25 serves areas in Illinois, Indiana, Iowa, and Kentucky from its Regional Office in Indianapolis and its Subregional Office in Peoria.