Cassidy Law
MONTH-IN-BRIEF (Apr 2024)
Antitrust Law
Urgent: FTC Final Rule Outlaws Nearly All Noncompete Agreements
On April 23, the Federal Trade Commission, by a 3–2 vote along partisan lines, issued a 570-page final rule banning most noncompete clauses in employment contracts as an “unfair method of competition.” The FTC based its authority to promulgate the rule on Sections 5 and 6(g) of the Federal Trade Commission Act of 1914, as amended (the “FTC Act”); Section 5 prohibits “unfair methods of competition,” and Section 6(g) authorizes the FTC to “make rules and regulations for the purpose of carrying out the provisions of” the FTC Act. The rule will become effective (the “Effective Date”) 120 days after publication in the Federal Register, which is anticipated soon—perhaps as early as the first week in May.