FTC Addresses Non-Compete Clauses

On Tuesday, April 22, 2024, the US Federal Trade Commission (FTC) voted to adopt a near-total ban on non-compete clauses that prohibit workers from switching jobs within an industry. Employers must notify workers that existing non-competes are unenforceable within 120 days, unless the rule is delayed in court.

Just over a year ago, on April 17, 2023, NPGA joined almost 300 other associations (including the Chamber of Commerce) representing 45 states to submit a joint comment to the Federal Trade Commission regarding their proposed rule to ban non-compete clauses.  NPGA also spoke out against the rulemaking at a public listening session.  The joint comment stressed the need to protect confidential business information, benefits to companies and workers, and increased wages and benefits.  The comment further discussed the Federal Trade Commission’s overreach in proposing the rule.

A lawsuit over the rule has already been filed in federal court in Texas, and the Chamber of Commerce has also vowed to challenge the rule. NPGA will monitor legal challenges and update membership on enforcement.

Questions? Please contact Director of Regulatory Affairs and Associate General Counsel Kate Gaziano.