On April 23, 2024, the Federal Trade Commission (“FTC”) voted 3-2 to issue a proposed final rule (“Final Rule”), which, absent a successful legal challenge, will ban most noncompete agreements in the United States.
Despite more than 26,000 comments from the public, the Final Rule does not narrow the rule first proposed by the FTC in January 2023 (“Proposed Rule”), but in many ways, expands the scope of what is considered an impermissible noncompete. The Final Rule will take effect 120 days after its publication in the Federal Register, after which employers will be expected to comply with its requirements. The FTC is already facing numerous legal challenges to its authority to issue the Final Rule, which may delay, limit or prohibit its implementation.
Key Provisions of the Final Rule
The vast majority of the FTC’s 570-page publication concerning the Final Rule consists of a summary setting forth the FTC’s rationale and responses to public comments, followed by just 8 pages containing the text of the Final Rule itself.
Read the full post on Proskauer’s Law and the Workplace blog.