{"id":9700,"date":"2024-07-27T22:07:54","date_gmt":"2024-07-27T20:07:54","guid":{"rendered":"https:\/\/usadenmarklaw.com\/?p=9700"},"modified":"2024-07-27T22:26:20","modified_gmt":"2024-07-27T20:26:20","slug":"new-ftc-rule-banning-most-non-competes-in-the-u-s-as-of-september-2024","status":"publish","type":"post","link":"https:\/\/usadenmarklaw.com\/en\/new-ftc-rule-banning-most-non-competes-in-the-u-s-as-of-september-2024\/","title":{"rendered":"New FTC Rule Banning Most Non-Competes in the U.S. as of September 2024"},"content":{"rendered":"

On April 23, 2024, the Federal Trade Commission (\u201cFTC\u201d) announced its Final Non-Compete Clause Rule (\u201cFinal Rule\u201d), comprehensively banning both existing and new non-competition (\u201cnon-compete\u201d) agreements nationwide, with a few narrow exceptions. Under the Final Rule, employers will be prohibited from entering new non-compete agreements with workers and must notify workers with existing non-compete agreements that those agreements will become unenforceable. The Final Rule was published in the Federal Register on May 7, 2024, and will become effective on <\/span>September 4, 2024 <\/b>(\u201cthe Effective Date\u201d), unless a court enjoins or invalidates it before then. The rule aims to promote economic competition, labor market mobility, innovation, and business formation by preventing employers from unfairly restricting workers in their employment opportunities after leaving their current employer.<\/span><\/p>\n

Overview of the Final Rule<\/i><\/b><\/span><\/p>\n

Under the Final Rule, existing non-competes for the vast majority of workers will no longer be enforceable after the rule\u2019s Effective Date. Existing non-competes for <\/span>senior executives <\/b>can remain in force under the Final Rule, but employers are banned from entering into or attempting to enforce any new non-competes, even if they involve senior executives. The Final Rule defines senior executives as workers who are in a <\/span>\u201cpolicy making\u201d<\/b> position and who received at least <\/span>$151,164 <\/b>in total compensation in the preceding year.<\/span><\/p>\n

Mandatory Notice Requirement<\/i><\/b><\/span><\/p>\n

On or before September 4, 2024, employers will be required to provide \u201cclear and conspicuous\u201d notice <\/strong>to current and former employees<\/strong>, other than senior executives, who are bound by an existing non-compete that they will not be enforcing any non-competes against them. There are several requirements to this notice, including how it is delivered to the employee.<\/span><\/p>\n

Noteworthy Exceptions<\/i><\/b><\/span><\/p>\n

Although the Final Rule is expansive, there are a few limited exceptions. First, the restriction on non-competes will not apply to the <\/span>bona fide sale of a business<\/b>, ownership interests, or operating assets. In addition, the Final Rule will not apply for causes of action related to a non-compete agreement that occurred before the Effective Date. Hence, workers who breach non-compete agreements before the Effective Date may still be subject to liability after the Effective Date. Lastly, the third exception relates to instances of \u201cgood faith,\u201d where an employer enforces, attempts to enforce, or represents there is an applicable non-compete if that employer believes, in good faith, that the Final Rule is not applicable.<\/span><\/p>\n

Our Team Can Help<\/i><\/b><\/span><\/p>\n

The FTC’s action against non-compete agreements marks a significant change, compelling employers and employees to reconsider strategies for safeguarding business interests and advancing personal careers. At USA Denmark Law, our team of attorneys can review your existing agreements to determine their enforceability and <\/span>identify employees who will need to receive notice no later than on September 4, 2024<\/b>. We can also assist with reviewing and revising template contracts to remove non-competes to ensure compliance. Should you have any questions or concerns about the implications of this development, please do not hesitate to reach out to a member of our team.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

On April 23, 2024, the Federal Trade Commission (\u201cFTC\u201d) announced its Final Non-Compete Clause Rule (\u201cFinal Rule\u201d), comprehensively banning both existing and new non-competition (\u201cnon-compete\u201d) agreements nationwide, with a few narrow exceptions. Under the Final Rule, employers will be prohibited from entering new non-compete agreements with workers and must notify workers with existing non-compete agreements […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[40],"tags":[],"acf":[],"yoast_head":"\nNew FTC Rule Banning Most Non-Competes in the U.S. as of September 2024 | USA DENMARK LAW<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/usadenmarklaw.com\/en\/new-ftc-rule-banning-most-non-competes-in-the-u-s-as-of-september-2024\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New FTC Rule Banning Most Non-Competes in the U.S. as of September 2024 | USA DENMARK LAW\" \/>\n<meta property=\"og:description\" content=\"On April 23, 2024, the Federal Trade Commission (\u201cFTC\u201d) announced its Final Non-Compete Clause Rule (\u201cFinal Rule\u201d), comprehensively banning both existing and new non-competition (\u201cnon-compete\u201d) agreements nationwide, with a few narrow exceptions. 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