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FTC Issues Rule Banning Employee Non-Compete Agreements

On April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 in favor of issuing a final rule that will essentially ban employers’ use of non-compete agreements in the workplace. Although the FTC’s non-compete rule isn’t scheduled to go into effect until 120 days after it is published in the Federal Register, the U.S. Chamber of Commerce has already filed a lawsuit challenging the legality of the FTC’s decision.

Despite the uncertainty of whether the FTC’s non-compete rule will survive judicial scrutiny, businesses must nonetheless understand what agreements are covered under the rule and begin taking steps to proceed as if the rule will go into effect late this summer or early fall.

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