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The FTC's New Non-Compete Rule: What Business Owners Need to Know

What is the New Rule?

On January 5, 2023, the Federal Trade Commission (FTC) issued a final rule prohibiting non-compete agreements with all workers.

This means that employers can no longer prevent workers from:

• Starting a competing business
• Working for a competitor
• Sharing information about their former employer with others

Exceptions to the Rule

There are a few exceptions to the rule, including:

• Non-competes that are necessary to protect a legitimate business interest, such as trade secrets
• Non-competes that are entered into between the sale of a business

What Does This Mean for Business Owners?

The FTC's new rule is a significant change for businesses. Employers can no longer rely on non-compete agreements to protect their businesses from competition.

Instead, businesses should focus on:

• Building a strong brand
• Offering competitive salaries and benefits
• Creating a positive work environment

Conclusion

The FTC's new non-compete rule is a major change for businesses. By understanding the rule and its implications, businesses can take steps to mitigate the risk of losing valuable employees to competitors.

Additional Resources

• FTC Bans Non-Compete Clauses to Protect Workers
• What the New FTC Rule Means for Non-Competes
• FTC Finalizes Sweeping Ban on Non-Compete Agreements