FTC Bans Non-Compete Clauses Starting September 2024

The FTC's new rule banning non-compete clauses is set to take effect on September 4, 2024, impacting all workers, including contractors and interns. Despite various legal challenges that have created uncertainty around the rule's constitutionality, employers are advised to prepare for compliance, which includes notifying affected workers that their non-compete agreements will no longer be enforceable. The rule aims to void nearly all non-compete provisions and includes exceptions primarily for business sales. Companies are encouraged to adopt proactive measures for protecting trade secrets and confidential information, as non-compete agreements are not the sole method for safeguarding such assets. Legal experts caution that businesses must demonstrate reasonable efforts in maintaining confidentiality to protect their interests effectively. As the deadline approaches, the lack of a nationwide injunction means employers must act swiftly in adapting to these significant changes.