FTC non-compete ban banned – now what?

The FTC's rule banning non-compete agreements was blocked by Judge Brown, ruling it arbitrary and capricious. Employers can still enforce non-competes, but state laws may impose restrictions.

As David Renner and Theresa Panensky reported on August 8, 2024, earlier this year, the Federal Trade Commission (FTC) approved (3-2) a new rule that effectively bars companies from enforcing non-compete clauses for nearly all employees and independent contractors. The rule, as passed:

• Prohibited companies from entering into any new non-compete agreements that are not part of a bona fide sale of a business.

• Barred new non-compete agreements between employers and employees entered into outside the sale of a business.

• Required employers with existing non-compete agreements with non-senior executives to provide clear and conspicuous notice to those workers by September 4, 2024 that the worker’s non-compete clause will not be, and cannot legally be, enforced against the worker.

Read the full article on the WTW website.

Authors

David Renner
Founding Partner, Pierson Ferdinand LLP

Theresa Panensky
WTW West Region Leader, Claims Advocate of the Claims & Legal Group – FINEX