On Nov. 26, 2025, the U.S. District Court for the Eastern District of New York issued a preliminary injunction barring New York State from enforcing the recent legislative amendment that gave the New York Public Employment Relations Board (“PERB”) jurisdiction over private sector labor relations matters in New York. The Court found that federal law preempted the State’s action and gave exclusive jurisdiction to the National Labor Relations Board (“NLRB”).
As we previously reported (here and here), earlier this year Section 715 of the New York Labor Law was amended to provide coverage for private employees that are traditionally covered by the National Labor Relations Act (“NLRA”) by granting authority to PERB to oversee labor disputes in the private sector unless the NLRB had affirmatively obtained a court order establishing jurisdiction. The legislation enabled PERB to certify new union representatives without elections, adjudicate unfair labor practices, and exercise authority over new and previously negotiated collective bargaining agreements.
Two lawsuits to challenge the legislation were quickly filed. The NLRB sued New York to protect its jurisdiction. That matter remains pending. At about the same time, Amazon.Com Services, LLC (“Amazon”) filed suit to enjoin the prosecution and investigation of an unfair labor practice charge filed with PERB under the new law.
In granting the injunction, the federal court recognized that the Supremacy Clause of the U.S. Constitution establishes federal law as the “supreme Law of the Land . . . any Thing in the Constitution or Laws of any State to the Contrary notwithstanding,” which means that when federal and state law conflict, federal law prevails and state law is preempted. In the context of private sector labor relations, the U.S. Supreme Court has long held that when an activity is arguably subject to regulation under the NLRA, the States must defer to the exclusive competence of the NLRB and, as such, States are prohibited from setting forth standards of conduct inconsistent with the substantive requirements of the NLRA and from providing their own regulatory or judicial remedies for conduct prohibited or arguably prohibited by the NLRA. The Court in the Amazon matter rejected all of New York State’s arguments to create an exception to these established principles and defend the legislative amendment. Given that Amazon faced an immediate risk of parallel and potentially inconsistent proceedings from the state and federal regulatory schemes, the Court found there was irreparable harm justifying an immediate injunction.
While an appeal is expected, the current result is very good news. In the NLRB’s action, PERB had already agreed to stay any proceedings initiated against private sector employers. It is now enjoined from enforcing the New York law against private sector employers. This action, however, does not impact employers already subject to PERB’s jurisdiction, including public employers and agricultural employers.
As a result, it is far less likely that unions will file representation petitions or unfair labor practice charges with PERB, and instead address complaints through the NLRB. Currently, the NLRB remains without a quorum; however, the NLRB’s Regional offices and General Counsel’s office are active again following the government shutdown and have restarted conducting elections, issuing complaints, investigating charges, holding hearings and issuing interim ALJ decisions.
If you have any questions regarding these developments, please contact Tom Eron, Sam Wiles, or the Bond attorney representing you or your organization.
Does the saying “when the cat is away, the mice will play” apply to labor law? Some states, including New York, seem to think so. With the National Labor Relations Board (“NLRB” or the “Board”) currently lacking a quorum, New York and other pro-labor states are exploring ways to fill the regulatory gap left by a temporarily dormant federal agency. Some states view the lack of quorum as a threat to workers’ rights. Legislatures in those states have passed laws to allow state labor boards to fill in for the NLRB when it lacks a quorum or otherwise declines to exert jurisdiction.
Why the NLRB Is Inactive
The NLRB normally consists of five members and requires at least three to form a quorum—the minimum needed to issue decisions, make rules or take other major actions. In Jan. 2025, shortly after the new administration came into office, President Trump removed NLRB Member Gwynne Wilcox, leaving the Board with only two members. Wilcox challenged the removal but the Supreme Court reversed a lower federal court ruling temporarily reinstating her to the Board.
Absent a quorum, NLRB functions are significantly curtailed. Principally, the Board cannot issue decisions, certify elections, promulgate regulations or act in a manner that would otherwise require Board approval. While the National Labor Relations Act (“NLRA”) allows remaining members and NLRB staff to handle limited matters such as processing unfair labor practice charges through regional offices, the Board itself cannot issue decisions or change regulations without at least three members.
The NLRA Generally Preempts State Laws Aimed at Regulating Labor Disputes
Under the Supreme Court’s longstanding precedent in San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959), the NLRA generally preempts state and local laws that attempt to regulate private sector labor relations. That means where there is even the potential for conflict between the NLRA and state or local law, then such state/local law is preempted.
Section 14(c)(2) of the NLRA does permit limited state involvement when the NLRB has expressly declined jurisdiction by rule or decision. However, the NLRA does not address state authority when the NLRB is unable to act due to a lack of quorum. As a result, states are largely left without authority over private sector labor disputes, aside from specific exceptions like agriculture or public employment.
New York's Proposed Law: Senate Bill S8034A
Against this backdrop, the New York State Legislature passed Senate Bill S8034A (the “Bill”), legislation that would allow the state to step in where the NLRB cannot act and represents an attempt to take control over labor relations in the event of a quorum-less Board.
The legislation amends Section 715 of the New York Labor Law to provide coverage for private employees that are normally covered by the NLRA. The Bill, if signed by the Governor, would give authority to New York’s Public Employment Relations Board (“PERB”) to oversee labor disputes in the private sector in the event that the NLRB cannot “successfully assert jurisdiction” – in cases such as where the Board lacks a quorum. This would enable the PERB to certify elections and to exercise authority over any previously negotiated collective bargaining agreements.
PERB already has the authority to assert control over certain private sector employers such as small employers that do not meet federal commerce thresholds and thus fall outside of the jurisdiction of the NLRA. But this Bill would significantly expand PERB’s role, allowing it to fill the void left by a nonfunctioning NLRB across a much broader swath of the private sector.
New York’s Moves to Support Labor
This Bill is not a new attempt by New York to regulate in the labor space as the state recently and aggressively sought to expand state power over labor relations. For example, in 2019, New York passed a law known as the Farm Laborers Fair Labor Practices Act (FLFLPA), which covers all farm laborers across the state. The FLFLPA extended coverage of New York’s State Employment Relations Act to agricultural laborers and added certain unique provisions. Specifically, the FLFLPA permits farm workers to organize via a “card check” agreement as an alternative to elections and gives mediators power to impose contracts on unions and employers when they do not reach agreement quickly.
Industry groups and workers have recently challenged those actions as unconstitutional and some of those challenges remain pending.[1]
Conclusion
While Governor Hochul has yet to sign or consider the Bill, New York employers should be aware of increased statewide activity in spaces normally reserved for federal agencies during a period of decreased federal oversight. With respect to the NLRB specifically, New York’s Bill may also be a dead letter upon arrival as President Trump recently nominated two new members to the Board, Scott Mayer (chief labor counsel at Boeing Co.) and James Murphy (former NLRB attorney). If approved by the Senate, they would increase the Board membership to four (4) and establish the quorum necessary for it to act.
With respect to the NLRB specifically, employers should also be aware that even though the Board currently lacks a quorum, its operations remain as active as possible. To that end, regional offices are still processing and investigating unfair labor practice allegations, issuing complaints to the maximum extent permitted by law and conducting administrative law judge hearings on complaints. Moreover, the Board’s precedents and regulations – including many union friendly rulings issued by the Board under the Biden Administration – remain in effect, meaning employers are still subject to those standards and precedents. Employers who run afoul of established federal labor law could face liability down the road if charges commenced against them now – when the Board lacks a quorum – nevertheless reach the Board in the future when it has reestablished a quorum. Employers should continue to maintain compliance with current Board law.
If you have any questions or would like additional information, please contact Samuel Dobre, Samuel Wiles, Jason Kaufman or the Bond attorney with whom you are regularly in contact.
Once again, the National Labor Relations Board (the Board) has upended long-established precedent. On Nov. 13, 2024, the Board issued its decision in Amazon.com Service, LLC, banning so-called “captive audience meetings” where employers express their views on unionization.
We previously reported that the National Labor Relations Board (NLRB or the Board) General Counsel Jennifer Abruzzo issued a memorandum in May 2023 advancing the position that non-compete agreements between employers and employees that limit employees from accepting certain jobs at the end of their employment, interfere with employees’ rights under Section 7 of the National Labor Relations Act (the Act). On October 7, 2024, the General Counsel issued another memorandum that expands her position on non-compete agreements by stating her opposition to certain repayment arrangements often included in sign-on bonus and retention bonus programs and policies to reimburse for relocation costs, training and education courses, that are commonly referred to as “stay-or-pay” provisions.
The General Counsel’s memorandum does not represent a statement of the current law nor does it establish new law. Rather, it is the latest effort by the General Counsel, in her advocacy role, to try to reinterpret the NLRA, which, in this case, may serve to restrict employers’ actions to protect their legitimate interests.
New Potential Penalties for Unlawful Non-Compete Agreements
The General Counsel’s May 2023 memorandum stated her position that most non-compete agreements violate employees’ Section 7 rights. General Counsel Abruzzo’s rationale for this position is that non-compete agreements may deter employees from resigning or threatening to resign in protest of working conditions. In the October 2024 memorandum, the General Counsel states her intent to pursue expansive remedies against employers found to have maintained unlawful non-compete agreements.
Specifically, according to the General Counsel, where an employer has been found to have maintained a non-compete agreement or provision that is unlawful under the Act, the employer should be ordered to post a notice of its violation and, during the notice-posting period (usually 60 days), current employees should be permitted to come forward to show their entitlement to damages. The memo states that an employee need prove only the following: (1) There was a vacancy available for a job with a better compensation package; (2) they were qualified for the job; and (3) they were discouraged from applying for or accepting the job because of the non-compete provision. The employer would then be required to compensate the employee for the difference (in terms of pay or benefits) between what the employee would have earned and what they did earn during the same period. Additionally, former employees would be able to come forward to claim any damages, such as reductions in earnings or increased time between jobs, that they experienced due to the non-compete agreement or provision.
To be clear, these remedies are not current Board law. While they only represent the General Counsel’s newly formulated enforcement strategy, such remedies become a relevant factor in an employer’s risk assessment over the use and enforcement of non-compete agreements.
The Burden to Justify Stay-Or-Pay Provisions Will Fall on the Employer
The GC memorandum defines a stay-or-pay provision as “any contract under which an employee must pay their employer if they separate from employment, whether voluntarily or involuntarily, within a certain time frame.” Stay-or-pay provisions are generally tied to employee benefits such as sign-on bonuses, retention bonuses, payments for relocation costs and reimbursement for tuition and other costs associated with educational programs and training courses. The memo also describes so-called “quit fees” and damages clauses as arrangements that impose a financial penalty on the employee for their separation from employment untethered to a pre-payment or benefit previously provided to the employee.
The General Counsel’s view is that all stay-or-pay provisions similarly have a tendency to interfere with, restrain or coerce employees in the exercise of their Section 7 rights by limiting employee mobility and by “increas …[ing] employee fear of termination for engaging in activity protected by the Act.” In her opinion, all stay-or-pay provisions are presumptively unlawful. They will be found to violate the Act unless an employer rebuts this presumption by providing that the provision advances a legitimate business interest and is narrowly tailored to minimize infringement on Section 7 rights. An employer can meet this standard by proving that the stay-or-pay provision: (1) is voluntarily entered into in exchange for a benefit; (2) has a reasonable and specific repayment amount; (3) has a reasonable “stay” period; and (4) does not require repayment if the employee is terminated without cause.
General Counsel Abruzzo explains that where a stay-or-pay provision was voluntarily entered into with informed consent but is not narrowly tailored in one or more ways discussed above, the employer should be ordered to rescind the unlawful provision and replace it with a lawful one. However, where the arrangement was not entered into with informed consent, the General Counsel will seek an order that includes the cancelation of the debt to the employer.
The outsized reach of the General Counsel is illustrated by her proposed mandatory rewrite of sign-on bonus arrangements:
With respect to cash payments, such as a relocation stipend or sign-on bonus, in my view a stay-or-pay provision can only be considered fully voluntary if employees are given the option between taking an up-front payment subject to a stay-or-pay or deferring receipt of the same bonus until the end of the same time period. Only in this way can employees who anticipate possibly engaging in protected concerted activity avoid becoming indebted to their employer without a significant financial downside. If the only alternative was to decline the cash payment outright, that “choice” would be illusory. . . .
In addition, the memo urges that the remedies for an unlawful “stay-or-pay” provision should be the same as an unlawful non-compete, as they both restrict employment mobility. Therefore, the General Counsel’s position is that the posting requirement for a violation should include notice that individuals will be entitled to damages if they show that: (1) There was a vacancy available for a job with a better compensation package; (2) they were qualified for the job; and (3) they were discouraged from applying for or accepting the job because of the stay-or-pay provision. If the employer attempted to enforce an unlawful “stay-or-pay” provision, there will be additional remedies, such as the employee’s legal fees or compensation for damage to their credit.
The GC memorandum offers employers a 60-day window to “cure” pre-existing stay-or-pay provisions that advance a legitimate business interest by altering the provisions’ terms to conform with the requirements set forth above. Stay-or-pay provisions that do not adhere to the General Counsel’s requirements will be subject to prosecution after December 6, 2024.
What Employers Should Do
While the memorandum is not binding on the Board, it does provide direction to the NLRB regional offices to investigate and prosecute unfair labor charges. Additionally, it is reasonable to expect the current Board to give careful consideration to the General Counsel’s arguments and recommendations as cases involving these provisions and agreements come before the Board in the future. How receptive to these sweeping changes the federal courts and, ultimately, the U.S. Supreme Court will be, remains to be seen.
Employers should carefully consider the arguments and opinions laid out in the memo when evaluating the need for non-compete agreements with different categories of employees, the terms of those agreements and the specific business interests that the agreements are designed to protect in light of the prospect of expansive remedies for current and former employees bound to non-compete agreements.
Similarly, as to “stay-or-pay” arrangements, employers would be well served to consult with legal counsel to evaluate their existing agreements in light of the General Counsel’s new, far-reaching perspective on these common benefit terms, including consideration of the 60-day window (until December 6, 2024) to modify existing “stay-or-pay” provisions, to assess the risks of future unfair labor practice claims.
On July 26, 2024, the National Labor Relations Board (NLRB) issued a new final rule concerning blocking charges, the voluntary recognition bar and union recognition in the construction industry that, in Orwellian fashion, it has misnamed, the “Fair Choice -- Employee Voice” rule. This new rule rescinds the 2020 rule known as the “Election Protection Rule,” and is yet another initiative of this Board to enable unions to become or remain exclusive bargaining representatives of employees without affording employees the opportunity to exercise their choice by voting in a Board-run secret ballot election. The new rule takes effect on September 30, 2024.
On March 8, 2024, the Eastern District of Texas issued a decision striking down the National Labor Relations Board’s (NLRB or Board) recently-adopted rule governing the standard for joint employer status, further delaying the rule’s implementation.
On October 27, 2023, the National Labor Relations Board (NLRB) issued a final rule that vastly expands the definition of joint employment under the National Labor Relations Act (NLRA). As we reported previously, this new rule rescinds and replaces the 2020 focus on “direct and immediate control” with a less-demanding standard intended to expressly ground the joint-employer rule in common-law agency principles.
The National Labor Relations Board (NLRB) continues to drastically change the law and tilt the playing field against employers and in favor of labor unions. Last week, the Biden NLRB issued new rules governing the unionization process that mark a return to the “quickie elections” from the Obama era. This week the NLRB issued a landmark decision in Cemex Construction Materials Pacific (372 NLRB No. 130) that seriously undermines both employer and employee rights by disfavoring secret ballot elections.
On Aug. 25, 2023, the National Labor Relations Board (NLRB) published a final rule regarding election proceedings. In issuing the rule, the NLRB reinstated election procedures it issued in 2014. These procedures shorten the union election and certification processes and reinstate what have been termed “ambush” elections. In 2019 the NLRB issued a rule replacing many of the provisions of the 2014 rule, but several of the provisions of the 2019 rule were invalidated in AFL-CIO v. NLRB, 57 F.4th 1023 (D.C. Cir. 2023). The NLRB’s latest rule rescinded additional provisions of the 2019 rule. Specifically, the NLRB’s new rule implements the following:
On August 2, 2023, the National Labor Relations Board (NLRB or Board) issued its decision in Stericycle, Inc., 372 NLRB No. 113 (2023), where it adopted a new legal standard to determine whether an employers’ work rules violate Section 8(a)(1) of the National Labor Relations Act (NLRA). The Board’s decision overrules existing precedent and establishes a more stringent test that is likely to render some existing work rules facially unlawful.
The following article by Bond attorney Alice Stock was published by Law360
Can an employer give employees a wage increase or benefits improvement during a union organizing campaign or while negotiating a first collective bargaining agreement after a union has won an election? At present, in most situations, it will be unlawful for an employer to do so.
On June 13, 2023, the National Labor Relations Board (the Board), in its decision in the Atlanta Opera, Inc,[1] brought back for an encore, its 2014 FedEx II[2] standard for determining independent contractor status under the National Labor Relations Act (the Act). In doing so, the Board overruled and closed the curtains on its 2019 SuperShuttle[3] decision, bringing back a pro-employee standard for determining whether workers are employees covered under the Act or independent contractors not subject to the Act’s protections.
