FTC Issues Final Rule Banning New Worker Non-Compete Clauses And Nullifying Most Existing Worker Non-Compete Clauses

On April 23, 2024, the Federal Trade Commission ("FTC"), by a 3-2 vote, approved and issued a Final Rule, set to become effective 120 days after it is published in the Federal Register ("Effective Date"), that will ban all worker non-compete clauses except those entered into before the Effective Date with workers who qualify as "senior executives." When effective, the Final Rule will have a significant impact on the tools available to businesses for protection of their business interests.

Key Definitions and Points under the Final Rule

• Under the Final Rule, a "non-compete clause" means a "term or condition of employment that prohibits a worker from, or penalizes a worker for, or functions to prevent a worker from" either (a) seeking or accepting work with a different employer where such work is to begin after the conclusion of the employment that includes the term or condition, or (b) operating a business after the conclusion of the worker's employment with