FTC Passes Rule Banning Non‑Competes

April 25, 2024 –  Earlier this week, on April 23, the Federal Trade Commission ("FTC") promulgated a  Final Rule banning almost all post-employment non-compete agreements between employers and workers in the United States. The Final Rule has limited exceptions for (1) non-compete agreements with "senior executives" that are "existing" as of the effective date of the rule; (2) non-compete actions that have accrued before the rule becomes effective; and (3) non-competes entered into in connection with the sale of a business.

The Final Rule is slated to go into effect 120 days after its publication in the Federal Register (the "Effective Date"). On April 24, the U.S. Chamber of Commerce filed a complaint in the U.S. District Court for the Eastern District of Texas challenging the FTC's authority to issue the rule. The Chamber or other potential challengers to the rule are likely to seek a preliminary injunction blocking the rule from taking effect pending court