FTC will ban non-competes

The FTC on April 23 issued a final rule that will ban non-compete agreements nationwide. [Full text]

This will apply to almost all workers, whether classified as an employee, independent contractor, extern, intern, volunteer, apprentice, or a sole proprietor.

There will be two main exceptions:

-- Existing non-competes for senior executives can remain in force, but employers are banned from entering into or attempting to enforce any new non-competes, even if they involve senior executives.

-- The final rule does not apply to non-competes entered into by a person pursuant to a bona fide sale of a business entity.

Employers will be required to provide notice to workers other than senior executives who are bound by an existing non-compete that they will not be enforcing any non-competes against them.

All of this will be effective 120 days after the rule is actually published in the Federal Register.