FTC Releases Final Rule Prohibiting Non-Competes

On April 23, 2024, the Federal Trade Commission (FTC) released its final rule(the Final Rule) which generally bans all non-competition clauses with workers (including employees and independent contractors) as unfair methods of competition, with exceptions for bona fide sale of business non-competes and for non-competes entered into with "senior executives" prior to the effective date of the Final Rule, which will be 120 days after the date of publication in the Federal Register. The Final Rule's prohibitions on non-competes do not apply where a cause of action related to a non-compete clause accrued prior to the effective date of the Final Rule. The Final Rule was issued after a review and comment period of the proposed rule, issued January 5, 2023 (the Proposed Rule), and was approved by a vote of 3-2 by the FTC. This Advisory summarizes the key takeaways from the Final Rule. Several challenges to the rule are pending and others may be forthcoming, including by the