RPJ Partner Deena Merlen Discusses New FTC Non-Compete Clause Rule

The FTC announced yesterday that a rule banning most non-compete agreements has been approved.  Under the Non-Compete Clause Rule, existing non-competes for senior executives (which refers to workers earning more than $151,164 annually and who are in policy-making positions) can remain in force, but for-profit employers will be banned from entering into or attempting to enforce any NEW non-competes, even if they involve senior executives.  For-profit employers will be required to provide notice to workers other than senior executives who are bound by an existing noncompete that they will not be enforcing any non-competes against them.  Details on the Non-Compete Clause Rule can be viewed here.

Although the Non-Compete Clause Rule is scheduled to become effective throughout the nation 120 days after publication in the Federal Register, the implementation of the new rule may well be delayed as legal challenges are expected.  We are monitoring for developments.

This article is intended as a general discussion of these issues only and is not to be considered legal advice or relied upon. For more information, please contact RPJ Partner Deena R. Merlen, who counsels clients in areas of employment and labor law, intellectual property, media and entertainment, general business law, commercial transactions and dispute resolution. Ms. Merlen is admitted to practice law in Connecticut and New York.