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Major Shift: FTC Prohibits Most Noncompete Clauses in Employment Contracts
ARTICLE | June 25, 2024
Authored by Vasquez + Company
The Federal Trade Commission (FTC) has issued a final rule banning most noncompete agreements nationwide, which is scheduled to take effect in September 2024. This rule comes after extensive public commentary and is expected to impact around 30 million American workers. The article outlines the reasons employers use noncompete agreements, the legal challenges the rule faces, and the limited exceptions and potential benefits for workers. The FTC's decision aims to foster competition and innovation while providing new opportunities for employees.
Key Points:
- Scope: The ban will affect most noncompete agreements, with exceptions for certain senior executives and specific industries.
- Employer Options: Companies can still use trade secret laws and nondisclosure agreements to protect proprietary information.
- Worker Benefits: The FTC anticipates the rule will lead to job creation, increased earnings, lower healthcare costs, and more innovation.
For more information, read the full article here.
Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose
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