FTC Rule Bans Non-Compete Agreements Nationwide

On Tuesday, the Federal Trade Commission ("FTC") issued its long-awaited final rule regarding non-compete agreements. The FTC determined that non-compete agreements are an unfair method of competition and, therefore, a violation of the FTC Act. Once the rule is effective, employers may not enter new non-compete agreements with employees or enforce existing non-compete agreements against former employees, other than senior executives. The rule only applies to businesses that are subject to the FTC Act, which generally does not include non-profit corporations.

The rule has a few exceptions to the non-compete ban, which are outlined below:

1. Senior Executives: Existing non-compete agreements with senior executives remain enforceable. However, employers may not enter new non-compete agreements with senior executives. A senior executive is a worker earning more than $151,164 annually who is in a "policy-making position." The FTC makes clear that this exception is