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ARTICLE · 13 JANUARY 2023

FTC Proposes Sweeping Ban On Non-compete Clauses For Workers

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The U.S. Federal Trade Commission (FTC) has proposed a new rule that would largely ban employers from requiring employees to not compete with them following cessation...

United StatesEmployment and HR
Christopher Caparelli
Christopher Caparelli
Ellie Kang
Ellie Kang
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The U.S. Federal Trade Commission (FTC) has proposed a new rule that would largely ban employers from requiring employees to not compete with them following cessation of employment. If adopted, the FTC's rule would supersede a patchwork of state laws that, in most jurisdictions, permit non-competition agreements so long as they are reasonable in length of time and geographic scope.

What you need to know

  • The FTC proposes to materially change the terms of employment for an estimated 30 million American workers by imposing a sweeping ban on non-compete clauses.
  • The ban would allow a limited exception for non-compete clauses intended to protect a business's goodwill when sold to a new owner.

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