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HR Talk!

FTC Approval To Ban Noncompete Clauses In Employment Contracts.


April 2024, the Federal Trade Commission issued a final rule to promote competition by banning noncompetes nationwide. What does that mean for workers? It protects the fundamental freedom of workers to change jobs, increase innovation, and foster new business formation. An estimated 30 million workers are subject to a non-compete.


Noncompetes have been a practice that imposes conditions that prevent workers from taking a new job or starting a new business. Noncompetes force workers to either stay in a job they want to leave or force them to switch to a lower-paying job. It could potentially cause the worker to leave the workforce altogether.


However, there may be some alternatives such as non-disclosure agreements (NDAs). These provide employers with established means to protect proprietary and other sensitive information of the organization.


The final rule will become effective 120 days after publication in the Federal Register-September 4, 2024.


Find more information here on the FTC website

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