This CLE webinar will provide an in-depth look at the Federal Trade Commission's (FTC) long-anticipated final rule banning worker noncompete provisions with few exceptions. The panel will examine the impact on businesses, address interaction with state law, and, given the expansive scope of the rule, address what counsel and clients should be doing now to prepare for compliance despite legal challenges.
On Apr. 23, 2024, the FTC published its long-anticipated final rule banning the use of noncompete clauses in the workplace for most workers with limited exceptions. Despite immediate legal challenges, given the scope and impact of the final rule, counsel and their clients should understand the rule's requirements and begin preparing for compliance in the event that the rule fully survives judicial scrutiny. Timing will be important.
The final rule effectively covers any person or business operating for profit within the FTC's jurisdiction and imposes a prospective ban on new noncompete agreements with any worker, broadly defined to include employees, independent contractors, externs, interns, volunteers, apprentices, and sole proprietors. The rule also invalidates all existing noncompete provisions except for those with "senior executives" who are narrowly defined in the rule.
The rule defines "noncompete clause" as a term or condition that prohibits, penalizes, or prevents workers from seeking or accepting work after the end of their employment. The FTC states that whether a given contractual provision constitutes a "noncompete" clause is a fact-specific inquiry. Therefore, whether other restrictive covenants such as non-solicitation clauses can fall within the rule's purview although these are not specifically addressed.
Before the rule's effective date, employers will be required to provide written notice to current or former workers that their noncompete clause cannot be legally enforced and will not be enforced against the worker. There are limited exceptions to the ban.
Listen as our expert panel provides an in-depth look at the FTC's final rule banning the use of worker noncompete provisions. The panel will discuss the impact on businesses, address the current state of the rule's implementation including any legal challenges, and describe the rule's interaction with state laws. The panel will also offer best practices for preparing for compliance.
