Federal Trade Commission Prohibits Employers from Enforcing Noncompete Agreements
On Tuesday, April 23, 2024, the Federal Trade Commission (FTC) voted to ban most noncompete agreements. The ban excludes active non-compete agreements for Senior Executives (those who make more than $151,164 per year and can make policies) but will ban future non-compete for Senior Executives.
Hostility Toward Non-Competes Continues
We previously reported on the Federal Trade Commission’s proposed rule banning non-competes. The final vote on that rule has reportedly been delayed until 2024. In the meantime, two more states and the National Labor Relations Board have taken steps to outlaw non-competes.
FTC Issues Proposed Rule Banning Non-Competes
On January 5, 2023, the Federal Trade Commission (“FTC”) proposed a rule prohibiting employers from entering or enforcing non-compete clauses with their workers. The proposed rule would supersede any inconsistent state law. Given a March 2022 US Treasury Department report finding that one in five Americans are subject to a non-compete, this proposed rule – if it becomes final – will have a significant impact on the workplace.