Federal Trade Commission Votes to Ban Non-Compete Agreements
April 25, 2024
The Federal Trade Commission issued a final rule April 23 widely banning non-compete agreements used extensively in business, including construction, to prevent departing employees from becoming major competitors. Some employer groups have already pledged to challenge the rule in court, although it does not take effect for months. The rule bans new non-compete agreements with all workers. It does allow existing non-competes with senior executives to remain, but existing edicts for all other workers will not be enforceable after the rule takes effect. The rule also clarifies that fixed-duration employment contracts do not count as non-competes.
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