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Michelle Petrazzuolo

Non-Compete Agreements Banned

Updated: Apr 29




If you’re using non-compete agreements with your employees, you’ve got big news to digest today. The Federal Trade Commission has today announced a new rule banning most non-competes.


Essentially, for-profit companies may not ask employees to sign such agreements any longer. But don’t do anything just yet!


You can keep any agreements you have with senior executives - for now.

If you have a current agreement with an senior executive, you don’t have to drop it. A senior executive has to be someone earning $151,164 or more AND has policy-making responsibility.


You may not create new non-competes, and you must notify employees if theirs is no longer in effect because of this rule.

Once the rule goes into effect, you have to notify employees that their agreement is no longer valid, but you have some time, for two big reasons.


The rule goes into effect in 120 days from its publication in the federal register.

That gives you four months from that date (which has not yet been announced) to comply, so take this time now to figure out what compliance would look like for you. That way, when you get to the effective date, you will already be prepared.


There’s a chance the rule will be struck down.

It’s nearly a guarantee this rule will face one or more court challenges before it can be implemented, which leaves open the possibility that it won’t become law. But we won’t know for sure for a while.


If you’re using non-competes to ensure retention, let’s talk!

Not only will it not work well for you, you’re not getting the engagement and productivity out of those people that you could be. Reach out for a conversation on how to create the workplace that is hard to say goodbye to!


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