{"id":320825,"date":"2024-04-26T13:00:30","date_gmt":"2024-04-26T07:30:30","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=320825"},"modified":"2024-05-02T17:49:31","modified_gmt":"2024-05-02T12:19:31","slug":"ftc-issues-final-rule-banning-non-competes-across-us","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/04\/26\/ftc-issues-final-rule-banning-non-competes-across-us\/","title":{"rendered":"FTC issues final rule banning non-competes across the US; Finds them to be violative of S.5 of the FTC Act"},"content":{"rendered":"
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Federal Trade Commission (\u201cFTC\u201d):<\/span> The FTC issued a final Non-Compete Clause rule on 23-04-2024 that bans non-competes across the country, to protect competition and the fundamental freedom of workers to change jobs, and to increase innovation and promote new business formation. The Commission determined that non-competes are an unfair method of competition, and therefore violative of Section 5 of the Federal Trade Commission Act, 1914 (\u201cFTC Act\u201d). The final rule will become effective 120 days after publication in the Federal Register.<\/p>\n

The Commission found that non-competes tend to negatively affect competitive conditions in labor markets by inhibiting efficient matching between workers and employers. The Commission also found that non-competes tend to negatively affect competitive conditions in product and service markets, inhibiting new business formation and innovation. It was noted that there is evidence that non-competes lead to increased market concentration and higher prices for consumers.<\/p>\n

Applicability:<\/span> The Rule bans all future non-competes after it comes into effect, and selectively allows for the existing non-competes, especially for those made for senior executives to remain enforceable. However, the existing non-competes for workers other than the senior executives will not remain enforceable beyond the effective date.<\/p>\n

Key points:<\/p>\n