What Employees Need to Know About The Federal Trade Commission’s New Non-Compete Rule

Posted

12 months ago

On April 23, 2024, the Federal Trade Commission (or FTC) issued a final rule that, if it goes into effect, would ban covenants not to compete (also known as “non-compete agreements” or just “non-competes”) throughout the United States, with very limited exceptions. An estimated 30 million American workers are subject to non-competes – including hundreds of thousands here in Connecticut – and those employees and many others probably have a lot of questions. Our goal here is to try to answer them. We will update this site as more information becomes available.

Please bear in mind that this information is intended for a general audience and, because each non-compete and each situation is unique, this blog post is no substitute for tailored advice from an experienced employment lawyer, nor does reading this information create an attorney-client relationship between you and our firm.

UPDATE (Sept. 2024): In late August, just two weeks before the FTC rule was scheduled to take effect, it was enjoined – or prohibited – by a federal court in Texas. The Texas court’s judgment bars the FTC from enforcing the rule on a nationwide basis. The FTC is likely to appeal this judgment, and the case ultimately could end up in the U.S. Supreme Court. For now, though, it’s as if the FTC rule does not exist. For Connecticut employees, the enforceability of almost all non-competes – with the exception of physicians, who have their own statute – is governed by the same five-part “reasonableness” test that has applied for decades.

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