FTC votes to ban noncompete agreements; ’a big change,’ says Rose Law Group partner and Corporate Transactions Director Shruti Gurudanti

By Taylor Giorno | The Hill

The Federal Trade Commission (FTC) voted 3-2 on Tuesday to ban noncompete agreements that prevent tens of millions of employees from working for competitors or starting a competing business after they leave a job.

From fast food workers to CEOs, the FTC estimates 18 percent of the U.S. workforce is covered by noncompete agreements — about 30 million people.

The final rule would ban new noncompete agreements for all workers and require companies to let current and past employees know they won’t enforce them. Companies will also have to throw out existing noncompete agreements for most employees, although in a change from the original proposal, the agreements may remain in effect for senior executives.


“The final rule essentially prohibits and invalidates noncompete agreements between for-profit employers and most employees, except for a few limited exceptions such as senior executives. While this final rule will likely get challenged, it’s a big change.”
– Rose Law Group partner and Corporate Transactions Director Shruti Gurudanti

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April 2024