On April 23, the Federal Trade Commission (FTC) announced a final rule that will ban nearly all non-compete agreements nationwide. The final rule provides that it is an unfair method of competition under the Federal Trade Commission Act for organizations to enter into non-compete clauses with workers on or after the final rule’s effective date, which will be 120 days after the rule’s publication in the Federal Register.
The rule also affects existing arrangements: non-competes entered into with senior executives before the rule’s effective date can remain in force, while existing non-competes with other workers are not enforceable after the effective date. This rule is very likely to draw legal challenges. We will monitor this story as it develops and provide additional analysis of the rule in the coming days.
