FTC Issues Final Rule Banning Non-Compete Agreements ...
On April 23, 2024, on a party line 3–2 vote, the Federal Trade Commission (FTC) voted to issue a final rule imposing a national ban on all employers from ...
The Federal Trade Commission (FTC) enforces non-compete agreements to protect competition and prevent unfair business practices.
Non-compete agreements are contracts between an employer and an employee that restrict the employee from working for a competitor or starting a competing business for a certain period of time after leaving the company.
The FTC considers non-compete agreements to be anti-competitive if they harm competition by limiting employee mobility or stifling innovation.
The FTC may challenge non-compete agreements that are overly broad, unreasonable in scope or duration, or not necessary to protect the employer's legitimate business interests.
Non-compete agreements must be narrowly tailored to protect the employer's trade secrets, confidential information, customer relationships, or other legitimate business interests.
The FTC may investigate and take enforcement action against employers who use non-compete agreements to unfairly restrict employee mobility or suppress competition in the labor market.
The FTC may require employers to modify or rescind non-compete agreements that violate antitrust laws or harm competition.
The FTC may also seek civil penalties, injunctive relief, or other remedies against employers who engage in anti-competitive conduct related to non-compete agreements.
The FTC encourages employees who believe they are being unfairly restricted by a non-compete agreement to seek legal advice and consider filing a complaint with the agency.
Employers should consult with legal counsel to ensure that their non-compete agreements comply with applicable laws and regulations, including those enforced by the FTC. They should also consider alternative methods of protecting their legitimate business interests without unnecessarily restricting employee mobility or competition.