Sullivan & Cromwell LLP
04/24/2024 | Press release | Distributed by Public on 04/25/2024 02:16
Federal Trade Commission Issues Final Rule Banning Most Non-Compete Agreements with Workers
April 24, 2024
Final Rule Largely Implements January 2023 Proposed Rule, but Adopts Different Approach for Senior Executives that Allows Existing Non-Compete Clauses to Remain in Effect
The Federal Trade Commission has issued the final text of its Non-Compete Clause Rule, which bans most employers from entering into new-or enforcing existing-non-compete agreements with workers, with limited exceptions for agreements connected to the sale of a business and certain pre-existing agreements with senior executives. The rule reflects a significant expansion of the FTC's rulemaking authority, with implications that could reach beyond the labor markets. Multiple litigations challenging the rule have already been filed, asserting that Congress has not vested the FTC with authority to issue the rule.