FTC Rule Banning Noncompete Agreements Blocked Nationwide
The FTC's final noncompete rule was challenged via lawsuits filed in different federal courts around the country.
August 28, 2024 at 12:48 PM
4 minute read
Board of ContributorsIn January 2023, the Federal Trade Commission (FTC) issued a proposed rule that would ban most noncompete agreements throughout the United States. After receiving more than 26,000 public comments, this past April the FTC voted 3-2 to approve a final rule. The final rule covers any type of worker, including employees and independent contractors. Any existing noncompete agreement for a "senior executive" (defined as a worker earning more than $151,164 who is in a "policy-making position") could remain in force, but no new compete-agreements would be permitted for any workers. For existing noncompete agreements (except for a "senior executive"), the final rule would require employers to notify their employees that their non-compete agreements are no longer enforceable. Noncompete agreements that are part of the sale of business would continue to be permitted and enforceable.
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