How the FTC’s New Ban on Non-Compete Provisions Impacts Your Business & Strategies You Can Adopt to Help Prepare for This Major Regulation
The FTC’s new rule banning most non-compete provisions, which takes effect September 4, 2024, will materially transform the employment landscape. The rule is a sweeping change affecting most industries and takes effect at the end of the summer. Now is the time for all employers to become familiar with this law and prepare for its impacts. For employers, this rule will materially impact employment agreements and will result in less protection for business interests. Employers must review and revise all standardized employment and related agreements and have an obligation to notify current and former employees whose agreements contain what will soon be unenforceable non-compete provisions.
For employees, on the other hand, the rule is expected to have major changes in the job market, opening up new opportunities and potentially higher wages for employees who previously were bound by what will soon be unenforceable, unlawful non-compete provisions.
While legal challenges to the rule have been filed, which ultimately may delay or overturn the law, every employer must take immediate steps to assess their employment agreements, practices, and ensure they will comply with this law. Failing to act now may expose employers to penalties and severe legal consequences. All employment compliance strategies must be assessed and modified to meet the requirements of this law.
