FTC's New Rule Prohibits Non-Compete Agreements

On April 23, 2024, the Federal Trade Commission (FTC) issued a final rule that bans non-compete agreements nationwide. The final rule will become effective 120 days after publication in the Federal Register. Under the final rule, which survived by a single vote, employers will be prohibited from entering into or attempting to enforce any non-compete agreements, either with workers or senior executives, once the final rule takes effect.

Regarding existing non-competes, only those agreements with senior executives will remain enforceable. Employers will also be required to notify workers (other than senior executives) who are subject to existing non-competes that those agreements are no longer enforceable.