The FTC's Non-Compete Ban: Litigation Updates And Practical Considerations

On April 23, 2024, the U.S. Federal Trade Commission (FTC) issued its final rule (the Final Rule) invalidating virtually all new and existing non-compete clauses (non-competes) that prohibit a service provider from working or operating a business in the U.S. during any post-employment period, with limited exceptions. The Final Rule also requires companies to provide written notice to all current and former service providers subject to unenforceable non-competes that such clause is now illegal and unenforceable. Additional details of the Final Rule can be found in our previous bulletin.

In this article, we turn to the recent challenges to the non-compete ban and provide practical tips for companies to prepare ahead of the Final Rule's effective date.