The FTC’s Final Non-Compete Clause Rule (the “Rule”) was published in the Federal Register on May 7, 2024, and will become effective on September 4, 2024, unless pending litigation delays or prevents its implementation.
The Rule makes it a violation of Section 5 of the Federal Trade Act for employers to enter into new non-compete provisions with workers on or after September 24, 2024, and existing non-competes will be void and unenforceable. Noncompete provisions entered into prior to September 4, 2024, with executives, as that term is defined, will remain in full force and effect.
It is highly likely that legal challenges to the Rule will delay or prevent the Rule’s implementation. At this time, it is recommended that employers continue their usual business practices regarding the use of non-compete agreements and assess their non-compete agreement practices next month, when more information is known as to if and when the Rule will go into effect. We will provide more information as it becomes available. If you would like to discuss the Rule and its implications for your company, please contact Rachel Felton, Neva Stotler, or other members of our employment law team.
This article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only and you are urged to consult a lawyer concerning your own situation and legal questions.
This post was written by Rachel Felton and Neva Stotler
