Federal Trade Commission Bans Non-Competes Agreements for Nearly All Workers
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Last week, the Federal Trade Commission (FTC) finalized a proposal, released over a year ago, that disallows non-compete agreements for nearly all workers. FTC states the rule will “promote competition by banning non-competes nationwide, protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.” The new rule prohibits any new non-compete agreements for all workers, including senior executives. However, any current non-competes for senior executives would remain in effect, while current agreements for “workers other than senior executives are not enforceable after the effective date.” The rule also props up the Bureau of Competition within the FTC through which workers can issue complaints if there are any suspected violations of the new rule. The FTC also states that the new rule does not preempt trade secret laws or non-disclosure agreements.
The final rule will become effective 120 days after its published in the Federal Register.
Click here to review the new non-compete rules. For more information, contact Kevin Walgenbach at kwalgenbach@nrmca.org.
