FTC Approves Final Rule to Void and Ban Most Employee Non-Compete Agreements, Faces Immediate Legal Challenges

On April 23, 2024, the Federal Trade Commission (FTC) approved, by a 3-2 vote, a final rule that would void and ban nearly all employee non-compete agreements in the United States. The rule will take effect 120 days after it is published in the Federal Register. However, the rule will be subject to immediate legal challenge and injunction efforts, including on the grounds that the FTC lacks the legal authority to promulgate such a rule. In fact, the first lawsuits on this issue were filed within hours of the FTC announcing its vote.

We will share a more comprehensive analysis of the final rule shortly.  In the meantime, below are links to our prior coverage of the FTC’s draft version of this rule, and coverage of recent developments in the state law non-compete landscape.

• LaborSpeak: Two Minutes on the FTC’s Proposed Ban on Non-Compete Agreements
• Proposed Rule Attempts to Ban Non-Compete Clauses as Method of ‘Unfair Competition’ Under Section 5 of FTC Act
• LaborSpeak: Proposed New York City Bills Would Ban or Restrict Non-Competes
• LaborSpeak: New York Bill Will Ban Non-Competes