FTC Final Rule on Non-Competes: Employer Should Consider Compliance Preparations and Implications
At present, the Federal Trade Commission’s (FTC) final rule on non-competes (the “Rule”) is set to go into effect on September 4, 2024 for virtually every for-profit employer in the United States. Though legal challenges remain pending , there is uncertainty as to whether any nationwide injunction will be entered prior to September 4. Given the existing uncertainty, employers should consider preparing for compliance . At the very least, employers should focus on the potential implications of non-compliance. The Final Rule: Scope and Required, Individual Notice As a reminder, subject to limited exceptions discussed below, the Rule invalidates existing non-competes and prohibits future non-competes, regardless of industry and regardless of whether a worker is an employee or an independent contractor . The Rule bans all non-competes nationwide, including de facto non-competes , with narrow exceptions for (1) existing non-competes with “senior executiv...