Executive Summary: On April 23,
2024, the Federal Trade Commission (FTC) issued its long-awaited
final rule, banning virtually all noncompetition agreements between
employers and workers. Just as the ink dried, the first lawsuit (of
several anticipated cases) challenging the final rule was filed,
and now many employers are left to wonder what to do next. The
final rule goes into effect 120 days after it is published in the
Federal Register. The purpose of this Legal Alert is to 1)
summarize the most important aspects of the final rule and 2)
provide guidance to employers on how to navigate their existing
agreements during this uncertain time.
What the Final Rule Does
The FTC determined that an employer entering into a
noncompetition agreement with any worker after the effective date
of the final rule (120 days after the final rule's
publication in the Federal Register) violates Section 5 of the FTC
rule. This includes noncompetition agreements contained in
