On April 23, the Federal Trade Commission (FTC) voted to adopt a monumental final rule prohibiting employers from entering into non-competes against all workers within the jurisdiction of the FTC – a move that is poised to reshape how employers approach employment agreements.
The rule is set to go into effect 120 days after publication in the Federal Register (currently scheduled to occur on May 7), but implementation could be delayed due to pending litigation challenging the rule. Notably, the regulation includes a provision that the rule will not apply to a cause of action related to a non-compete clause that accrued prior to the Effective Date (presumably, which will be September 4, 2024). As a result, any current litigation involving a non-compete will not be impacted by the rule.