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The FTC Ban on Non-Compete Agreements: What Employers Need to Know

The FTC Ban on Non-Compete Agreements

On April 23, 2024, the Federal Trade Commission (FTC) voted to ban non-compete agreements for the vast majority of employment purposes. The new rule prohibits employers from entering into new non-compete agreements with any workers, including contractors, and requires all employers to inform any current and past workers that their non-compete agreements are unenforceable.

Employers who fail to abide by the new rule may face an adverse FTC enforcement action, prohibitive injunctions, and civil penalties up to $10,000 per individual offense. The new rule will go into effect 120 days after it is published in the Federal Register, likely at the end of August 2024, unless stayed by a court.

The compliance process involves identifying all current and past workers affected by non-compete agreements, notifying them of the unenforceability of those non-compete agreements, and removing non-compete agreements from any employment contracts looking forward.
 

What You will Learn

- What is a Non-Compete Agreement?
- Why is the FTC banning them?
- Unenforceability of existing agreements
- Senior Executive Exemptions
- Other agreements
- What will happen now?
- When will the new regulation take effect?
- What should employers do in response to the new regulation?
- Is there a notice requirement for existing agreements?
- Common Law and non-compete agreements
 

Why You Should Attend

THE non-compete clause has been causing trouble for over 600 years. In 1414 an English court heard the case of John Dyer, an apprentice whose master had stopped him from plying his trade for six months. The judge was having none of it. “The contract is contrary to common law,” he ruled. Individuals should be free to pursue the livelihood of their choice.

That principle has been diluted in the intervening centuries—most countries give businesses some leeway to use non-compete clauses, whereby workers promise not to start or join firms that go head-to-head with their ex-employer. About 20% of employees have some sort of non-compete agreement in place.

HR is primarily responsible for drafting and enforcing non-compete agreements. This webinar will help HR to focus on the future of these agreements and what to do, both now and, going forward.
 

Who will Benefit

- Company Leadership
- Compliance professionals
- HR Professionals
- Managers
- Supervisors
- Anyone who is concerned about trade secrets and confidentiality of documents, products and services. 

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