Last year, the Federal Trade Commission (FTC) issued its Noncompete Clause Rule that banned future noncompete contracts with workers and invalidated most existing noncompete contracts between workers and their employers.
The one exception to the new bans on noncompete clauses or contracts involves those made with senior executives, which are still allowed or valid. Learn more about the invalidity of noncompete agreements below.
When did the law change?
The Federal Trade Commission’s Noncompete Clause Rule went into effect on Sept. 4, 2024, so it has been in effect for a little bit over a year now. Also, it bans both new noncompete clauses and disallows old ones from being enforced unless those employees signing are senior executives.
What to do about existing noncompetes?
To be in compliance with this new FTC regulation, employers are bound to inform their employees that all affected noncompetes are now unenforceable. Any contracts containing unenforceable noncompetes must be redrafted to avoid including them in any contracts or employee handbooks.
If your employer attempts to force you into signing a noncompete clause (and you are not a senior executive), you may have grounds for legal action.
Is every worker exempted?
Pretty much, except for the aforementioned senior executives still bound by noncompete agreements. It doesn’t matter if the employees work full-time or part-time, are externs, interns, salaried or hourly employees, apprentices, independent contractors or even volunteers. If they are not senior executives, they cannot be subject to noncompete agreements.
What if my employer insists that I sign?
It is possible that your employer is still unaware of the regulatory changes. You can inform them yourself or seek legal representation and have your counsel intercede with your employer for you.
