Federal Trade Commission Bans Non-Compete Agreements

Banning noncompete agreements has been a trend in recent years. Noncompete agreements, referred to as “restrictive covenants”, are contracts that are designed to prevent workers from leaving their current employer to work immediately for a competitor.  The restrictive covenant oftentimes establishes a specific timeframe that employees need to wait before beginning work for said competitor.

The ban will go into effect 120 days from publication in the Federal Register.

 

US Employers will also be required to give notice before the effective date to workers whose noncompete agreements will be no longer enforceable. 

 

The Chamber of Commerce, the nation's largest business lobby, are joining forces with a growing number of employers arguing that noncompete agreements serve as an important purpose to protecting an employer's investment in employees as well as proprietary information and intellectual property.

 

Compliance will continue to follow this and will report on information as it becomes available.

 

Source(s): GovDocs, received on April 25, 2025; JD Supra, received on April 25, 2025.