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What Just Happened:
The Federal Trade Commission (FTC) has voted to enact a far-reaching ban on non-compete agreements. This decision, resulting from a 3-2 vote, will take effect 120 days following its publication in the Federal Register. The rule aims to prohibit all new non-compete agreements and will render most existing ones unenforceable, except under certain conditions for senior executives.

​Go Deeper:

1. Broad Applicability: The new FTC rule prohibits the creation of new non-compete clauses with any workers after the rule's effective date, categorizing such agreements as an unfair method of competition under Section 5 of the FTC Act.
2. Exclusions and Conditions for Existing Non-Competes: The rule carves out exceptions for existing non-competes involving senior executives, defined as those earning over $151,164 annually and holding policy-making positions. These can remain in effect. However, for most workers, existing non-competes will become non-enforceable after the rule’s effective date, and employers must notify those subject to non-compete agreements that these clauses will no longer be enforced against them.
3. Commissioners Question FTC Authority: Two Republican FTC commissioners, Melissa Holyoak and Andrew Ferguson, opposed the rule, arguing that the FTC has overstepped its regulatory authority. This significant opposition echoes concerns previously raised by the Association and the Restaurant Law Center (RLC), who questioned the FTC's authority to issue such a rule in comments to the proposed rule last year.

For More:
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FTC: Non-Compete Ban Final Rule
FTC: Final Rule Press Release
Association/RLC: Comments in Opposition to Proposed Rule