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ARTICLE · 09 JANUARY 2023

FTC Issues Proposed Rule Banning Non-Compete Agreements

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On January 5, 2023, the Federal Trade Commission ("FTC") voted 3-1 to propose a rule that, if adopted, will dramatically impact companies that use noncompete agreements...

United StatesEmployment and HR
David Johnson
David Johnson
Jennifer Aaron Hataway
Jennifer Aaron Hataway
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On January 5, 2023, the Federal Trade Commission (“FTC”) voted 3-1 to propose a  rulethat, if adopted, will dramatically impact companies that use noncompete agreements to protect their business interests. Under the proposed rule, virtually all agreements that prevent a worker from accepting employment with another business post-termination would be prohibited. The only exception would be a noncompete agreement that is entered into by a substantial owner (a person holding at least 25% interest) of a business as part and parcel of the sale of that business (or asset purchase). Answers to some key questions about the proposed rule are set forth below:

Q.  What happens to my company's existing noncompete agreements?

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