The Federal Trade Commission (FTC) has voted 3-2 to ban non-compete agreements. This ban on non-competes would become law 120 days after it is published in the Federal Register, which will probably happen in a few days. However legal challenges could delay or block this change.
The U.S. Chamber of Commerce said it would sue to block “this unnecessary and unlawful rule and put other agencies on notice that such overreach will not go unchecked.” The new rule would “undermine American businesses’ ability to remain competitive,” the trade group, which advocates for U.S. corporations and businesses, said in a statement.
Noncompete contracts affecting many current senior executives can remain in effect, the commission said, but employers are barred from trying to impose new non-competes on any employee, including executives. This new rule defines executives as employees “in policy-making positions” who make at least $151,164 annually. It also requires employers to notify non-executive employees bound by an existing non-compete that it will no longer be enforceable.
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https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes