Important Takeaways From The Final Rule Banning Non-Competes

In an anticipated yet groundbreaking turn of events, on April 23, 2024, the Federal Trade Commission ("FTC") voted 3-2 to issue a Final Non-Compete Clause Rule (the "Final Rule") which bans U.S. employers from using non-compete agreements for almost all workers.

The Final Rule is already the subject of multiple legal challenges, but if not enjoined by a court, the Rule will become effective within 120 days of publication in the Federal Register.

The Final Rule applies to agreements between employers and all "workers," which include employees, independent contractors, externs, interns, volunteers, apprentices, or sole proprietors. The Rule prohibits employers from enforcing existing non-competes with workers other than senior executives after the compliance date (i.e. 120 days after the Final Rule is published in the Federal Register).