Legal Brief: Update on the FTC’s Non-Compete Ban

February 18, 2025
Security Business Magazine

Types : Bylined Articles

TLDR: The ban has been struck down and the old rules remain in place for now

As I noted in June, a pending rule by the Federal Trade Commission (FTC) banning most non-compete clauses in employment contracts was likely to be challenged in court. Indeed, the rule was successfully challenged.

Before we get to the analysis, it makes sense to outline the most important elements of the rule. The rule prohibited employers from imposing non-competes on workers (including independent contractors and unpaid workers) – by banning all terms or conditions of employment which prevented or penalized a worker from either seeking or accepting work in the United States with a different person, or operating a business in the United States, after their employment ends.

The rule would require employers to give notice that existing non-competes are no longer enforceable; however, it created exceptions allowing for the enforcement of existing non-compete agreements with certain senior executives that were entered into before the rule’s effective date.