last week that will effectively eliminate the use of noncompete agreements. The change will have major impacts on most businesses, regardless of their size.
Immediately following the FTC’s announcement, the U.S. Chamber of Commerce said it would sue based on the agency’s “unlawful power grab.” Once published in the Federal Register — which should be shortly — the rule would then become finalized in 120 days.Employers are now required to give notice to all employees of this new rule. Example language can beAlthough all employees will be affected, it’s also important to evaluate exactly who may be excluded.
Noncompete agreements that are included as part of the sale of a business are also exempted from this rule. Deferred compensation and “garden leave” arrangements would also be excluded, according to Schiller.“Even though the FTC has proposed terminating noncompetes, businesses can still protect their proprietary information and trade secrets with nondisclosure and confidentiality agreements,” Schiller said.