The Federal Trade Commission released a nationwide ban on noncompete agreements on April 23rd, 2024. Note that this new rule is subject to a moratorium of 120 days and we are expecting that this ban will be challenged in court so it could be deemed an invalid ban before being in place in August 2024.
The noncompete ban distinguishes two categories of workers:
- Senior executives (or Management) – Employees earning more than $151k annually and in policy-making decisions are not subject to the ban so you can still maintain and enforce noncompete agreements for this category group.
- Other employees – these employees will not be subject to non competes, so new offers/contracts should be executed without noncompete clauses and if it goes forward, the business will have to communicate the invalidation of those noncompete agreements.
