The Federal Trade Commission (FTC) has withdrawn its notices of appeal in cases before the Fifth and Eleventh Circuits that involved challenges to its proposed rule to ban most employee non-compete agreements. That FTC rule, issued under former FTC Chair Lina Khan in April 2024, was struck down by federal district courts in Texas and
Antitrust Scrutiny of HR Practices Intensifies Globally
The European Commission has issued its first fine in a no-poach case in the labor market, and its first sanction of the anti-competitive use of a minority share in a competing business. With the fine of EUR 329 million, the Commission joins the ranks of a number of high-profile antitrust enforcers worldwide that have targeted
Breaking News: The FTC Bans Nearly All Employer-Employee Noncompetes Except Those Given as Part of a ‘Bona Fide’ Sale of Business
On April 23, the Federal Trade Commission voted 3-2 to issue its final rule on noncompetes, imposing a near-total ban on all employer-employee noncompetes in the US. Barring challenges (the first lawsuits have already been filed), the rule would become effective 120 days from publication.
The rule will be a game-changer for companies operating in the US if it takes effect as issued.
Breaking it Down
What does the rule do?
With only a few exceptions, the FTC’s now-final rule declares employer-employee noncompete clauses an “unfair method of competition,” and a violation of Section 5 of the FTC Act. The rule targets both formal noncompete clauses and “functional noncompete” clauses that have the effect of prohibiting the worker from seeking or accepting employment with a person or operating a business after the conclusion of the worker’s employment with the employer. This can include broad nondisclosure agreements that have the effect of precluding workers from seeking employment opportunities in the same field.Continue Reading Breaking News: The FTC Bans Nearly All Employer-Employee Noncompetes Except Those Given as Part of a ‘Bona Fide’ Sale of Business