Highlights
The FTC has voted to prohibit non-compete agreements with
workers
Employers must notify all workers that existing non-compete
agreements are unenforceable
The final rule will take effect at the end of August 2024,
unless stayed by a court
On April 23, 2024, the Federal Trade Commission (FTC) voted to
ban non-compete agreements in the employment context. The new rule
forbids employers from entering into new non-compete agreements
with any workers, including contractors, and requires all employers
to inform any current and past workers that their non-compete
agreements are unenforceable.
Employers who fail to abide by the new rule may face an adverse
FTC enforcement action, prohibitive injunctions, and civil
penalties up to $10,000 per individual offense. The new rule will
go into effect 120 days after it is published in the Federal
Register, likely at the end of August 2024, unless stayed by a
court.
