FTC Approves Final Rule That Would Ban Almost All Non-Competes

On April 23, 2024, the Federal Trade Commission voted 3-2 to publish a proposed final rule that would ban nearly all worker non-competes. If the proposed final rule goes into effect, it will present a major legal change affecting workers and businesses across the country. That said, the rule will not go into effect until 120 days after it is published in the Federal Register, and it already is subject to non-frivolous legal challenges that likely will delay and ultimately may invalidate the rule.

The proposed final rule has three major components. First, it would prospectively ban all new worker non-competes starting on the rule's effective date. The proposed final rule applies not only to employees, but to all "workers," including independent contractors. Second, it would make non-competes that already are in place on the rule's effective date unenforceable for all workers other than certain "senior executives." The regulatory definition of senior executives is