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ARTICLE · 30 APRIL 2024

FTC Noncompete Ban Already Challenged, Unlikely To Ever Take Effect

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On April 23, the Federal Trade Commission ("FTC") voted 3-2 to ban noncompete agreements, which prevent employees from working for competitors or launching a competing business after they leave a job.

United StatesEmployment and HR
Thomas J. "Tommy" McGoey, II
Thomas J. "Tommy" McGoey, II
Ellen George
Ellen George
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On April 23, the Federal Trade Commission ("FTC") voted 3-2 to ban noncompete agreements, which prevent employees from working for competitors or launching a competing business after they leave a job. The FTC's new rule is slated to go into effect 120 days after it is published in the Federal Register. Whether the rule will ever actually take effect, however, is uncertain.

The FTC first proposed a noncompete ban in January 2023, estimating that the rule would increase earnings by almost $300 billion each year. After publishing its proposal, the FTC received more than 26,000 public comments. The rule's final version, which is somewhat narrower than the original proposed rule, nullifies nearly all noncompete agreements and imposes a notice requirement on employers.

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