Whether you are an employer or an employee, the new Federal Trade Commission Rule announced on April 23, 2024 may affect you. The rule, which becomes effective approximately 120 days from now prohibits new non-compete agreements for all employees and makes all existing non-compete agreements unenforceable, unless the employee is a senior executive (income greater than $151,164 and a policy-making position).

Here is a link to the FTC’s press release that accompanied the final rule release: FTC Announces Rule Banning Noncompetes | Federal Trade Commission.

Employers will have about three months to comply with the requirement that they give notice of the change to all employees who currently are subject to a non-compete. If you are an employer, it would not be a bad idea to get the language from the link in the press release and get it done so it does not get overlooked.  Except for the notice, it appears that no action will be required.

Everyone should keep in mind that the commission pointed out that employers have other tools to protect their trade secrets and confidential information. The FTC identified, specifically Non-Disclosure Agreements (NDAs) and Trade Secret laws. If you are an employer and want to understand how to use the remaining tools and to remain compliant with the new FTC Rule, please contact Bundy & Fichter PLLC.  We deal with these issues all the time.