Today the Federal Trade Commission voted 3-2 to approve a Final Rule that, absent a successful legal challenge, will ban most noncompete agreements in the United States beginning 120 days after publication in the Federal Register.
Key provisions in the Final Rule are as follows:
- New noncompetes
- Banned for all workers, including "senior executives," following the effective date.
- "Senior executive" is defined as a worker who was in a policy-making position and has annualized compensation exceeding $151,164.
- Sale of business exception.
- Existing noncompetes
- May remain in effect after effective date for senior executives.
- Unenforceable for all other workers after the effective date.
We expect immediate legal challenges to be filed in court tomorrow.
Our detailed analysis will follow later today.
Federal Trade Commission Approves Rule Banning Most Noncompetes
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