The Federal Trade Commission ("FTC") issued a final rule that prohibits non-compete agreements in the United States ("Final Rule"). The FTC concluded that agreements between employers and their workers that restrict such workers' ability to work after terminating their employment are an unfair method of competition and an exploitative practice that adversely affects competitive conditions in labor, product, and service markets. The Final Rule will become effective September 4, 2024, and will apply retroactively to existing non-competes.
The Final Rule's definition of a non-compete is very broad and includes any term or condition of employment that prohibits, penalizes, or has the result of preventing a worker, after the termination of the employment, from seeking or accepting another job in the United States; or operating a business in the United States.
FTC Issues Final Rule Prohibiting Non-Compete Agreements in The US.
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