Client Alert: FTC ISSUES FINAL RULE BANNING MOST NON-COMPETE AGREEMENTS
April 23, 2024
The U.S. Federal Trade Commission (FTC) has approved a final rule banning most non-compete clauses. Specifically, the rule makes all non-compete agreements, except for those covering “senior executives”, unenforceable and requires employers to provide notice to current and former employees that their noncompete clauses are no longer in effect. “Senior executives” are employees earning over $151,164 who work “in a policy-making position”.
The rule goes into effect 120 days following its publication in the Federal Register (the date of publication is unknown at this time). Enforcement could be further delayed by likely legal challenges.
Employers are advised to revisit their restrictive covenants to ensure compliance and consider whether business interests can be protected with properly tailored non-solicitation or confidentiality clauses.
If employers have any questions or concerns, we recommend they contact us to ensure compliance. For assistance, contact us at 423-764-4127 or by email at sesco@sescomgt.com
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