Tuesday, April 23, 2024

Non-Compete Clause Rule

Pursuant to sections 5 and 6(g) of the Federal Trade Commission Act ("FTC Act"), the Federal Trade Commission ("Commission") is issuing the Non-Compete Clause Rule ("the final rule").  The final rule provides that it is an unfair method of competition -- and therefore a violation of section 5 -- for persons to, among other things, enter into non-compete clauses ("non-competes") with workers on or after the final rule's effective date.  With respect to existing non-competes -- i.e., non-competes entered into before the effective date -- the final rule adopts a different approach for senior executives than for other workers.  For senior executives, existing non-competes can remain in force, while existing non-competes with other workers are not enforceable after the effective date.

-- Summary of a new rule issued by the Federal Trade Commission banning the creation or enforcement of non-compete agreements, 23 April 2024

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