This afternoon, the Federal Trade Commission approved by a 3-2 vote a final rule to ban noncompetes between employers and their workers. If the rule remains in effect, it will have a significant impact on employers in Georgia and elsewhere.
Although the approved rule is not yet available, here are some initial highlights from the FTC’s meeting :
- All existing noncompetes with employees are invalid, except for those with senior executives (which was not defined in the FTC presentation today, but is presumably defined within the final rule).
- The final rule bans noncompete agreements with all employees going forward, including senior executives.
- The rule does not take effect for 120 days.
- The rule is likely to be challenged in court immediately, and the two dissenting Commissioners dispute that the FTC has the authority to issue this rule.
We will be closely reviewing the text of the final rule and will provide a helpful FAQ on this subject as soon as possible. In the interim, please reach out if you have questions.
As always, we will continue to monitor these ongoing developments to help you understand the implications on your business.
Benjamin Fink is known for his work in noncompete, trade secret and competition-related disputes. A shareholder at Berman Fink Van Horn, Ben concentrates his practice in business and employment litigation.
Neal Weinrich knows noncompetes and trade secrets inside and out. A shareholder at Berman Fink Van Horn, Neal counsels clients in all industries on matters involving restrictive covenants, trade secrets and other competition-related issues.
