FTC rule bans non-compete agreements

“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned,” said FTC Chair Lina M. Khan.

The final rule's expected effective date is September 4, 2024. Once the rule is effective, market participants can report information on a suspected violation of the rule to the Bureau of Competition by emailing noncompete@ftc.gov .

On April 23, 2024, the Federal Trade Commission (“FTC” or “the Agency”) voted 3-2 along partisan lines in a special public meeting to adopt the “Non-Compete Clause Rule” (the “Final Rule”), which will prohibit most employee non-competes with retroactive effect, except existing non-compete provisions of “senior ...