On April 23, 2024, the Federal Trade Commission (“FTC”) adopted a final rule prohibiting employers from entering non-competition agreements with workers after the rule’s effective date, except in very limited circumstances.
This new rule is presently scheduled to go into effect 120 days after publication of the final rule in the Federal Register. As anticipated, legal challenges to the newly adopted rule have been filed already. The U.S. Chamber of Commerce has sued the FTC, challenging the legality of the final rule. The U.S. Chamber of Commerce complaint is available HERE. At least two other lawsuits have been filed requesting that the court prevent the new rule from taking effect.
Although the new rule’s effective date remains unclear, employers should be prepared to comply with its requirements. If you have any questions regarding the timing and enactment of the final rule, including compliance with its notice requirements, please contact Kirsten McCaw Grossman or the NFC attorney with whom you usually speak.
