Employment / 1 min read
The Federal Trade Commission voted 3-2 on Tuesday to ban essentially all noncompete agreements that employers impose on workers. Under the new rule, existing noncompetes with senior executives can remain in effect but future noncompetes for top corporate officials will also be banned. Senior executives are less than 1% of workers and are defined as workers earning more than $151,164 who are in a “policy-making position.”
This Rule will take effect 120 days after the rule is published in the Federal Register.
The U.S. Chamber of Commerce has said it could file a challenge to the Rule, and the commission’s authority to adopt it, as soon as today.
Under the new rule employers with existing non-competes would be required to notify employees subject to the non-compete that the employer will not enforce the restrictive covenant. Such notices will have to be sent by the employer no later than the effective date of the rule.