FTC Votes To Bar Employers From Imposing Noncompete Agreements

On April 23, 2024, the Federal Trade Commission (FTC) issued a final rule banning (with limited exceptions) employers' use of noncompete agreements. The final rule will take effect 120 days after it is published in the Federal Register (the effective date) and applies to all types of employing entities (e.g., corporations, partnership, limited liability companies) of all sizes. As of the date of this alert, the rule remains unpublished.

For non-senior executive employees (and other service providers):

Employers will be prohibited from entering into (or attempting to enter into) noncompete agreements with workers on or after the effective date, and any noncompete agreements entered into prior to the effective date may not be enforced. The final rule defines "worker" as "a natural person who works or who previously worked, whether paid or unpaid, without regard to the worker's title or the worker's status under any other State or Federal laws, including, but not