The End of Non-Competition Agreements? Not so Fast!

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" /> </div> <div class="page"> <div class="pageheader"> <a class="pageheaderlogolink" href="/"> <img class="pageheaderlogo" src="/images/pageheaderlogo.png" alt="Baker Donelson" /></a> <button type="button" class="pageheaderbtn pageheaderbtn-menu noprint" title="Menu"><i class="fa fa-bars base" aria-hidden="true"></i><i class="fa fa-close active" aria-hidden="true"></i><span class="pageheaderbtn-label">Menu</span></button> <div class="pagenav noprint"> <div class="pagenav-listbox pagenav-heightfit"> <ul class="pagenav-list-primary"> <li> <a class="pagenav-list-primary__link" href="/professionals" rel="navbios">Professionals<span class="fa fa-angle-right"></span></a> <div class="pagenav-flybox pagenav-heightfit" id="navbios"> <div class="pagenav-fly pagenav-fly-bios"> <div class="sharedform-bd"> <label for="ctlNav_TxtSearchInput" class="sr-only">Name / Keyword</label> <input name="ctl00$mp$ctlNav$TxtSearchInput" type="text" id="ctlNav_TxtSearchInput" class="pagenav-bios-keywords" data-search-field="q" PlaceHolder="Name / Keywords" /> <label for="ctlNav_DDLOffice" class="sr-only">Office</label> <select name="ctl00$mp$ctlNav$DDLOffice" id="ctlNav_DDLOffice" data-search-field="office"> <option value="-1">Office</option> <option value="12869">Atlanta</option> <option value="28693">Baltimore</option> <option value="12874">Baton Rouge</option> <option value="12870">Birmingham</option> <option value="52820">Charleston</option> <option value="56937">Charlotte</option> <option value="12867">Chattanooga</option> <option value="19612">Columbia</option> <option value="54690">Dallas</option> <option value="28542">Falls Church</option> <option value="12855">Fort Lauderdale</option> <option value="12872">Houston</option> <option value="12866">Jackson</option> <option value="12857">Johnson City (Tri-Cities)</option> <option value="12865">Knoxville</option> <option value="12863">Macon</option> <option value="12862">Mandeville</option> <option value="12860">Memphis</option> <option value="12861">Memphis (East)</option> <option value="12859">Nashville</option> <option value="12858">New Orleans</option> <option value="12868">Orlando</option> <option value="49553">Raleigh/Research Triangle</option> <option value="58774">Virtual Office</option> <option value="12856">Washington, D.C.</option> </select> <label for="ctlNav_DDLPractice" class="sr-only">Practice</label> <select name="ctl00$mp$ctlNav$DDLPractice" id="ctlNav_DDLPractice" data-search-field="practice"> <option value="-1">Practice</option> <option value="37155">340B Drug Pricing Program</option> <option value="48497">Academic Medical Centers</option> <option value="34602">Adjustment of Status</option> <option value="12973">Admiralty and Maritime</option> <option value="20572">Advice and Counsel</option> <option value="32299">Affordable Housing </option> <option value="45051">Alternative Dispute Resolution (ADR) </option> <option value="16605">Ambulatory Surgery Centers</option> <option value="16608">Antitrust – Health Care</option> <option value="12972">Antitrust and Competition Law</option> <option value="16564">Appellate Practice</option> <option value="16676">Appropriations</option> <option value="54813">Artificial Intelligence</option> <option value="16656">Asset Based Finance</option> <option value="16619">Audits</option> <option value="16655">Automotive</option> <option value="16665">Automotive Finance</option> <option value="20360">Aviation</option> <option value="38018">Baker Women</option> <option value="16646">Bankruptcy and Commercial Restructuring</option> <option value="40468">Behavioral Health and Substance Use Disorders</option> <option value="56426">Biometrics</option> <option value="16623">Biotechnology, Chemical and Pharmaceuticals</option> <option value="51858">Blockchain and Digital Assets Technology</option> <option value="12969">Broker-Dealer/Investment Adviser</option> <option value="12942">Business and Corporate</option> <option value="16578">Business Succession Planning</option> <option value="16679">Cannabis Law and Regulation</option> <option value="16675">Capital Raising Services</option> <option value="16559">Class & Collective Actions</option> <option value="16541">Clinical Integration, Accountable Care Organizations and Value-Based Payments</option> <option value="16531">CMBS Special Servicers</option> <option value="16568">Commercial and Retail Insolvency</option> <option value="33052">Commercial Finance</option> <option value="16557">Commercial/Business Litigation</option> <option value="16622">Compliance Counseling</option> <option value="16587">Condominium Practice</option> <option value="12963">Construction</option> <option value="16563">Construction (Cross-Border Business)</option> <option value="58723">Construction Disaster Relief</option> <option value="12976">Consumer Lending</option> <option value="16647">Copyright Litigation</option> <option value="30343">Copyright, Media and Entertainment</option> <option value="32199">Corporate and Regulatory</option> <option value="16624">Corporate Finance</option> <option value="16574">Corporate Formations, Acquisitions and Other Business Transactions</option> <option value="20359">Corporate Governance</option> <option value="16668">Corporate Services</option> <option value="56496">Corporate Transparency Act</option> <option value="16590">Cosmetics</option> <option value="12949">Cross-Border Business</option> <option value="29937">Cross-Border Business Team: Austria, Germany and Switzerland</option> <option value="20350">Cross-Border Business Team: China</option> <option value="35103">Cross-Border Business Team: Italy</option> <option value="43318">Cross-Border Business Team: Japan</option> <option value="47496">Data Incident Response</option> <option value="16632">Data Protection, Privacy and Cybersecurity</option> <option value="47607">Data Protection: Financial Services</option> <option value="47567">Data Protection: Payment Card Industry Security</option> <option value="16536">Dialysis Centers</option> <option value="52839">Digital Health</option> <option value="16555">Directors and Officers Litigation</option> <option value="12945">Disaster Recovery and Government Services</option> <option value="38082">Diversity & Inclusion</option> <option value="16553">Drug, Device and Life Sciences</option> <option value="29012">Durable Medical Equipment, Prosthetics, Orthotics and Supplies </option> <option value="16653">Economic Development</option> <option value="16570">Economic Development – Inbound/Real Estate</option> <option value="16671">eDiscovery, Document Review and Investigation Services</option> <option value="51976">Electric Vehicle and Infrastructure</option> <option value="12957">Emerging Companies</option> <option value="12962">Eminent Domain</option> <option value="16585">Employee Benefits and ERISA Litigation</option> <option value="12961">Employee Benefits and Executive Compensation</option> <option value="16616">EMTALA</option> <option value="16618">Energy and Petroleum</option> <option value="16643">Energy Default and Restructure</option> <option value="16569">Energy Finance</option> <option value="16542">Environment and Energy</option> <option value="50954">Environment, Social and Governance (ESG)</option> <option value="12925">Environmental, Sustainability, and Product Stewardship</option> <option value="16610">Equipment Leasing and Finance</option> <option value="16615">Exempt Organizations – Health Care</option> <option value="16649">Exempt Organizations and Nonprofits</option> <option value="12954">Federal Aerospace and Defense Policy</option> <option value="52690">Federally Qualified Health Centers (FQHCs)</option> <option value="12979">Financial Services</option> <option value="39022">Financial Services Class Actions</option> <option value="16644">Financial Services Litigation</option> <option value="16597">Financing Long Term Care Facilities</option> <option value="12974">Food and Drug</option> <option value="48131">Food Safety & Regulation</option> <option value="51168">Franchise and Distribution</option> <option value="16588">Franchising – Health Care</option> <option value="35243">Fraud and Abuse Counseling</option> <option value="35110">GDPR</option> <option value="12986">Government Contracts</option> <option value="16562">Government Contracts (Cross-Border Business)</option> <option value="12958">Government Enforcement and Investigations</option> <option value="12950">Government Relations and Public Policy</option> <option value="16530">Health Care Bankruptcy and Distress</option> <option value="55084">Health Care Discrimination Litigation and Compliance</option> <option value="16678">Health Care Enforcement Actions and Investigations</option> <option value="38312">Health Care Mergers and Acquisitions</option> <option value="16540">Health Care Policy</option> <option value="41144">Health Care Private Equity</option> <option value="16620">Health Information Technology</option> <option value="28292">Health Law</option> <option value="16607">Health Systems/Hospitals</option> <option value="16606">HIPAA</option> <option value="29013">Home Health and Hospice Organizations</option> <option value="16604">Hospital/Physicians Joint Ventures</option> <option value="51167">Hospitality</option> <option value="56875">Hospital-Owned SNFs and Hospital-Affiliated SNFs</option> <option value="16601">HUD-Insured Financing</option> <option value="31637">Immigration</option> <option value="16561">Immigration (Cross-Border Business)</option> <option value="16681">Infrastructure and Surface Transportation</option> <option value="12966">Insurance Regulatory</option> <option value="12953">Intellectual Property</option> <option value="16565">Intellectual Property (Cross-Border Business)</option> <option value="12927">Intellectual Property and Technology Litigation</option> <option 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Liability</option> <option value="12941">Private Equity</option> <option value="12981">Pro Bono</option> <option value="16549">Product Liability, Class Action and Mass Tort</option> <option value="16548">Professional Liability</option> <option value="12932">Public Finance</option> <option value="16545">Public Hospitals and Health Systems</option> <option value="38950">Qualified Opportunity Zone Fund Investments</option> <option value="16635">Railroad</option> <option value="12935">Real Estate</option> <option value="16637">Real Estate Finance</option> <option value="16534">Real Estate Investment Trust (REIT)</option> <option value="44444">Real Estate Litigation</option> <option value="16657">Reductions in Force</option> <option value="16669">Regulatory and Compliance Services</option> <option value="16591">Reimbursement</option> <option value="12968">Residential Mortgage Lending and Servicing</option> <option value="16677">Restrictive Covenants</option> <option value="16673">Retail and Mixed Use</option> <option value="12964">Securities</option> <option value="12947">Securities Litigation</option> <option value="55970">Space</option> <option value="58107">Special Section: <em>Chevron</em> Doctrine</option> <option value="16544">Specialty Pharmacies and Pharmaceuticals</option> <option value="16661">State and Local Tax</option> <option value="12934">State Public Policy Advocacy</option> <option value="12936">Tax</option> <option value="16558">Tax (Cross-Border Business)</option> <option value="35851">Tax Controversy </option> <option value="39033">TCPA</option> <option value="12970">Technology</option> <option value="12926">Telecommunications</option> <option value="30998">Telehealth</option> <option value="12928">The Daschle Group</option> <option value="12971">The Howard Baker Forum</option> <option value="16641">Trade Secret Litigation</option> <option value="16609">Trademark and Branding</option> <option value="16645">Trademark and Unfair Competition Litigation</option> <option value="12937">Transportation and Logistics</option> <option value="16546">Transportation and Logistics Litigation</option> <option value="35752">Trials</option> <option value="49109">Trust, Estate and Fiduciary Litigation</option> <option value="12960">Trusts and Estates – Planning and Administration</option> <option value="42514">U.S. State Data Protection Laws</option> <option value="37374">University Technology Transfer and Commercialization</option> <option value="16535">Urgent Care</option> <option value="52184">Venture Capital</option> <option value="16674">Vessel Finance and Recovery</option> <option value="16571">Wage and Hour</option> <option value="33605">Water Treatment and Legionella</option> <option value="51957">Water Utilities</option> <option value="35131">WEBSCAN®</option> <option value="16567">Workers' Compensation</option> </select> <label for="ctlNav_DDLIndustry" class="sr-only">Industry</label> <select name="ctl00$mp$ctlNav$DDLIndustry" id="ctlNav_DDLIndustry" data-search-field="industry"> <option value="-1">Industry</option> <option value="16491">Admiralty and Maritime</option> <option value="12114">Automotive</option> <option value="16514">Automotive Finance</option> <option value="20587">Aviation</option> <option value="16522">Brand and Product Strategy, Management and Protection</option> <option value="16512">CMBS Special Servicers</option> <option value="12113">Construction</option> <option value="16500">Cross-Border Business (Manufacturing)</option> <option value="33058">Disaster Recovery and Government Services</option> <option value="12112">Drug, Device and Life Sciences</option> <option value="45840">Education</option> <option value="12117">Energy</option> <option value="16507">Energy Default and Restructure</option> <option value="16519">Energy Finance</option> <option value="16495">Environmental Compliance, Sustainability and Green Technologies</option> <option value="16501">Equipment Leasing and 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<select name="ctl00$mp$ctlNav$DDLPracticeExp" id="ctlNav_DDLPracticeExp" data-search-field="practice"> <option value="-1">Practice</option> <option value="37155">340B Drug Pricing Program</option> <option value="48497">Academic Medical Centers</option> <option value="34602">Adjustment of Status</option> <option value="12973">Admiralty and Maritime</option> <option value="20572">Advice and Counsel</option> <option value="32299">Affordable Housing </option> <option value="45051">Alternative Dispute Resolution (ADR) </option> <option value="16605">Ambulatory Surgery Centers</option> <option value="16608">Antitrust – Health Care</option> <option value="12972">Antitrust and Competition Law</option> <option value="16564">Appellate Practice</option> <option value="16676">Appropriations</option> <option value="54813">Artificial Intelligence</option> <option value="16656">Asset Based Finance</option> <option value="16619">Audits</option> <option value="16655">Automotive</option> <option 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value="16568">Commercial and Retail Insolvency</option> <option value="33052">Commercial Finance</option> <option value="16557">Commercial/Business Litigation</option> <option value="16622">Compliance Counseling</option> <option value="16587">Condominium Practice</option> <option value="12963">Construction</option> <option value="16563">Construction (Cross-Border Business)</option> <option value="58723">Construction Disaster Relief</option> <option value="12976">Consumer Lending</option> <option value="16647">Copyright Litigation</option> <option value="30343">Copyright, Media and Entertainment</option> <option value="32199">Corporate and Regulatory</option> <option value="16624">Corporate Finance</option> <option value="16574">Corporate Formations, Acquisitions and Other Business Transactions</option> <option value="20359">Corporate Governance</option> <option value="16668">Corporate Services</option> <option value="56496">Corporate Transparency Act</option> <option value="16590">Cosmetics</option> <option value="12949">Cross-Border Business</option> <option value="29937">Cross-Border Business Team: Austria, Germany and Switzerland</option> <option value="20350">Cross-Border Business Team: China</option> <option value="35103">Cross-Border Business Team: Italy</option> <option value="43318">Cross-Border Business Team: Japan</option> <option value="47496">Data Incident Response</option> <option value="16632">Data Protection, Privacy and Cybersecurity</option> <option value="47607">Data Protection: Financial Services</option> <option value="47567">Data Protection: Payment Card Industry Security</option> <option value="16536">Dialysis Centers</option> <option value="52839">Digital Health</option> <option value="16555">Directors and Officers Litigation</option> <option value="12945">Disaster Recovery and Government Services</option> <option value="38082">Diversity & Inclusion</option> <option value="16553">Drug, Device and Life Sciences</option> <option value="29012">Durable Medical Equipment, Prosthetics, Orthotics and Supplies </option> <option value="16653">Economic Development</option> <option value="16570">Economic Development – Inbound/Real Estate</option> <option value="16671">eDiscovery, Document Review and Investigation Services</option> <option value="51976">Electric Vehicle and Infrastructure</option> <option value="12957">Emerging Companies</option> <option value="12962">Eminent Domain</option> <option value="16585">Employee Benefits and ERISA Litigation</option> <option value="12961">Employee Benefits and Executive Compensation</option> <option value="16616">EMTALA</option> <option value="16618">Energy and Petroleum</option> <option value="16643">Energy Default and Restructure</option> <option value="16569">Energy Finance</option> <option value="16542">Environment and Energy</option> <option value="50954">Environment, Social and Governance (ESG)</option> <option value="12925">Environmental, Sustainability, and Product Stewardship</option> <option value="16610">Equipment Leasing and Finance</option> <option value="16615">Exempt Organizations – Health Care</option> <option value="16649">Exempt Organizations and Nonprofits</option> <option value="12954">Federal Aerospace and Defense Policy</option> <option value="52690">Federally Qualified Health Centers (FQHCs)</option> <option value="12979">Financial Services</option> <option value="39022">Financial Services Class Actions</option> <option value="16644">Financial Services Litigation</option> <option value="16597">Financing Long Term Care Facilities</option> <option value="12974">Food and Drug</option> <option value="48131">Food Safety & Regulation</option> <option value="51168">Franchise and Distribution</option> <option value="16588">Franchising – Health Care</option> <option value="35243">Fraud and Abuse Counseling</option> <option value="35110">GDPR</option> <option value="12986">Government Contracts</option> <option value="16562">Government Contracts (Cross-Border Business)</option> <option value="12958">Government Enforcement and Investigations</option> <option value="12950">Government Relations and Public Policy</option> <option value="16530">Health Care Bankruptcy and Distress</option> <option value="55084">Health Care Discrimination Litigation and Compliance</option> <option value="16678">Health Care Enforcement Actions and Investigations</option> <option value="38312">Health Care Mergers and Acquisitions</option> <option value="16540">Health Care Policy</option> <option value="41144">Health Care Private Equity</option> <option value="16620">Health Information Technology</option> <option value="28292">Health Law</option> <option value="16607">Health Systems/Hospitals</option> <option value="16606">HIPAA</option> <option value="29013">Home Health and Hospice Organizations</option> <option value="16604">Hospital/Physicians Joint Ventures</option> <option value="51167">Hospitality</option> <option value="56875">Hospital-Owned SNFs and Hospital-Affiliated SNFs</option> <option value="16601">HUD-Insured Financing</option> <option value="31637">Immigration</option> <option value="16561">Immigration (Cross-Border Business)</option> <option value="16681">Infrastructure and Surface Transportation</option> <option value="12966">Insurance Regulatory</option> <option value="12953">Intellectual Property</option> <option value="16565">Intellectual Property (Cross-Border Business)</option> <option value="12927">Intellectual Property and Technology Litigation</option> <option value="16576">International Arbitration and Dispute Resolution</option> <option value="16633">International Trade and National Security</option> <option value="12951">Labor & Employment</option> <option value="16660">Labor & Employment – Health Care</option> <option value="16550">Labor & Employment Litigation</option> <option value="16580">Labor Law</option> <option value="16680">Land Conservation and Real 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Not so Fast!</a></li> </ul> </div> </div> </div> </div> <div class="pagestrip pagestrip-darkbg pagestrip-article-type" data-lazybg="/images/corepage/114104_image.jpg"> <div class="sg-pagewidth"> <div class="pagestrip-section"><i class="ci-48" aria-hidden="true"><svg class="ci-icon" role='img' xmlns='http://www.w3.org/2000/svg' aria-hidden="true"><use xlink:href="#ci-shape-publications" xmlns:xlink='http://www.w3.org/1999/xlink'></use></svg></i><span>Publications</span></div> <h1 class="pagestrip-title">The End of Non-Competition Agreements? Not so Fast!</h1> <div class='pagestrip-article-date'>April 24, 2024</div> <div class="sharedsocialbar noprint"> <div class="sharedsocialbar-label">Share</div> <div class="addthis_toolbox addthis_32x32_style"> <a class="addthis_button_linkedin at300b" data-sga-action="media-share-linkedin" data-sga-label="linkedin" target="_blank" title="LinkedIn" href="https://www.linkedin.com/shareArticle?mini=true&url=https%3a%2f%2fwww.bakerdonelson.com%2fthe-end-of-non-competition-agreements-not-so-fast"><span class="at-icon-wrapper" style="background-color: rgb(0, 119, 181); line-height: 32px; height: 32px; width: 32px;"><svg xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink" viewBox="0 0 32 32" version="1.1" role="img" aria-labelledby="at-svg-linkedin-1" title="LinkedIn" alt="LinkedIn" class="at-icon at-icon-linkedin" style="width: 32px; height: 32px;"><title id="at-svg-linkedin-1">LinkedIn</title><g><path d="M26 25.963h-4.185v-6.55c0-1.56-.027-3.57-2.175-3.57-2.18 0-2.51 1.7-2.51 3.46v6.66h-4.182V12.495h4.012v1.84h.058c.558-1.058 1.924-2.174 3.96-2.174 4.24 0 5.022 2.79 5.022 6.417v7.386zM8.23 10.655a2.426 2.426 0 0 1 0-4.855 2.427 2.427 0 0 1 0 4.855zm-2.098 1.84h4.19v13.468h-4.19V12.495z" fill-rule="evenodd"></path></g></svg></span></a> <a class="addthis_button_twitter at300b" data-sga-action="media-share-twitter" data-sga-label="twitter" title="Twitter" href="http://twitter.com/intent/tweet?url=https%3a%2f%2fwww.bakerdonelson.com%2fthe-end-of-non-competition-agreements-not-so-fast"><span class="at-icon-wrapper" style="background-color: rgb(29, 161, 242); line-height: 32px; height: 32px; width: 32px;"><img src="/images/twitter-x.svg" class="media-twitter-x" /></span></a> <a class="addthis_button_facebook at300b" data-sga-action="media-share-facebook" data-sga-label="facebook" title="Facebook" href="https://www.facebook.com/sharer/sharer.php?u=https%3a%2f%2fwww.bakerdonelson.com%2fthe-end-of-non-competition-agreements-not-so-fast"><span class="at-icon-wrapper" style="background-color: rgb(59, 89, 152); line-height: 32px; height: 32px; width: 32px;"><svg xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink" viewBox="0 0 32 32" version="1.1" role="img" aria-labelledby="at-svg-facebook-3" title="Facebook" alt="Facebook" class="at-icon at-icon-facebook" style="width: 32px; height: 32px;"><title id="at-svg-facebook-3">Facebook</title><g><path d="M22 5.16c-.406-.054-1.806-.16-3.43-.16-3.4 0-5.733 1.825-5.733 5.17v2.882H9v3.913h3.837V27h4.604V16.965h3.823l.587-3.913h-4.41v-2.5c0-1.123.347-1.903 2.198-1.903H22V5.16z" fill-rule="evenodd"></path></g></svg></span></a> <a class="social_button_email" data-sga-action="media-share-email" data-sga-label="email" href="mailto:?Body="> <span class="at-icon-wrapper" style="background-color: #fff; line-height: 32px; height: 32px; width: 32px;"><svg xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink" viewBox="0 0 32 32" version="1.1" role="img" aria-labelledby="at-svg-email-4" title="Email" alt="Email" class="at-icon at-icon-email" style="width: 32px; height: 32px;"><title id="at-svg-email-4">Email</title><g><g fill-rule="evenodd"></g><path d="M27 22.757c0 1.24-.988 2.243-2.19 2.243H7.19C5.98 25 5 23.994 5 22.757V13.67c0-.556.39-.773.855-.496l8.78 5.238c.782.467 1.95.467 2.73 0l8.78-5.238c.472-.28.855-.063.855.495v9.087z"></path><path d="M27 9.243C27 8.006 26.02 7 24.81 7H7.19C5.988 7 5 8.004 5 9.243v.465c0 .554.385 1.232.857 1.514l9.61 5.733c.267.16.8.16 1.067 0l9.61-5.733c.473-.283.856-.96.856-1.514v-.465z"></path></g></svg></span> </a> <a class="sharedsocialbar-imitator" href="/epc/getstddoc.aspx?mediaid=57516" title="Print Version" rel="nofollow" data-sga-action="media-share-print" data-sga-label="print"><i class="fa fa-file-pdf-o" aria-hidden="true"></i></a> </div> </div> </div> </div> </div> <div class="pagebodymain"> <div class="pagebodycols"> <div class="sg-pagewidth"> <div class="pagebodycols-banner"> </div> <div class="sg-row sg-row-pad"> <div class="sg-col-lg-8"> <div class="pagebodycol-main"> <div class="wb-content"> <div class='sharedbody-intro'><p>The Federal Trade Commission (FTC) issued a <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule.pdf" target="_blank">final rule</a> in a partisan 3-2 vote on April 23, 2024 prohibiting employers from binding most American workers to post-employment non-competition agreements (the "Final Rule").</p> </div> <p>The Final Rule is set to take effect 120 days following its publication in the Federal Register, which we expect to happen soon. However, two lawsuits were filed the same day the FTC issued the Final Rule – one by the Chamber of Commerce in the United States District Court for the Eastern District of Texas and the second by a global tax services and software company in the Northern District of Texas – each challenging the Final Rule and arguing that the FTC lacked the authority to issue it. Given that these are the same courts that respectively struck down the National Labor Relations Board's joint-employer standard and the Department of Labor's "persuader rule," many legal observers expect that one or both courts will issue a nationwide injunction staying enforcement of the Final Rule until the issue can be decided on the merits and, ultimately, by a higher court. In addition, concerns exist that the Final Rule violates the Major Questions Doctrine, which states that Congress presumptively does not delegate to executive agency issues of major political or economic significance. Notably, the FTC is not an executive branch agency but an independent agency set up under Congress's authority and oversight.</p> <h3>Common Questions: Answered</h3> <p>Although the Final Rule's future is uncertain, workers and businesses alike should understand the contours of the Final Rule and be prepared to navigate current and former employees' questions and challenges in the near future. Below are the top ten questions we have received from our clients about the FTC's Final Rule.</p> <h4>1. Does the Final Rule apply to all workers and all employers?</h4> <p>The Final Rule applies to all natural persons who work or have worked, whether paid or unpaid, including independent contractors, externs, interns, volunteers, and apprentices, among others.</p> <p>The Final Rule also applies to most entities, including natural persons, partnerships, corporations, associations, or other legal entities within the FTC's jurisdiction, including "any person acting under color or authority of state law." Certain entities, however, fall outside the FTC's jurisdiction including:</p> <ol> <li>Certain banks and savings and loan institutions;</li> <li>Federal credit unions;</li> <li>Common carriers subject to the Acts to regulate commerce;</li> <li>Air carriers and foreign air carriers subject to the Federal Aviation Act of 1958;</li> <li>Entities subject to the Packers and Stockyards Act of 1921, as amended;</li> <li>Bona fide non-profit entities; and</li> <li>Entities owned by state and local governments.</li> </ol> <h4>2. What is a covered non-competition clause?</h4> <p>The Final Rule defines a non-competition clause, whether written or oral, as a term and condition of employment that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from: (i) seeking or accepting work in the United States with a different person where such work would begin after the conclusion of the employment that includes the term or condition, or (ii) operating a business in the United States after the conclusion of the employment that includes the term or condition. The Final Rule applies to employment agreements, employment policies, garden leave agreements, and severance agreements. In fact, the FTC's commentary issued with the Final Rule suggests that severance agreements and garden leave agreements cannot, under the Final Rule, contain a non-competition clause because such a clause would "penalize" a worker from seeking competitive work and/or starting a competitive business.</p> <h4>3. Does the Final Rule prohibit customer non-solicitation, employee non-solicitation, and/or non-disclosure provisions?</h4> <p>The FTC asserts that the Final Rule does not prohibit customer non-solicitation, employee non-solicitation, and/or non-disclosure provisions so long as those provisions do not "function to prevent" a worker from accepting or seeking work with a competitor or starting a competitive business. In fact, the FTC noted that a non-disclosure provision that prevents a worker from disclosing confidential information to a competitor would not be prohibited under the Final Rule. That said, whether such provisions functionally operate as a non-compete will be made on a case-by-case basis.</p> <h4>4. Does the Final Rule apply to franchises?</h4> <p>Yes and no. The Final Rule's definition of "worker" includes individuals who work for a franchisee or franchisor but, importantly, the Final Rule does not apply to franchisees in the context of a franchisee-franchisor relationship.</p> <h4>5. How does the Rule treat future non-competition clauses versus non-competition clauses already in place?</h4> <p>Businesses within the FTC's jurisdiction are prohibited from entering into non-competition agreements with workers on or after the Final Rule's effective date. Non-competition agreements entered into before the Final Rule's effective date are presumptively unenforceable for everyone except "senior executives."</p> <p>A senior executive is a worker who worked or works in a policy-making position <strong><u>and</u></strong>: (i) earned annual compensation of at least $151,164 in the preceding year; (ii) earned annual compensation of at least $151,164 on a pro-rata basis if employed during only part of the preceding year; or (iii) earned annual compensation of at least $151,164 when annualized in the year preceding the worker's departure and the worker was subject to a non-compete clause. A worker is in a policy-making position if the worker worked as the business's president, chief executive officer, or worked in an officer-level position with policy-making authority.</p> <p>Importantly, covered employers must provide current and former employees who previously entered into agreements with non-competition clauses with "clear and conspicuous notice" by the effective date that their non-compete clause will not be, and cannot legally be, enforced against them.</p> <h4>6. Does the Final Rule prevent an employer from having non-competition agreements that only apply to employees during their employment?</h4> <p>No. Non-competition agreements that only prevent competition during a worker's employment are still permissible subject to compliance with various state and local laws.</p> <h4>7. What happens to existing lawsuits that allege violations of non-competition clauses?</h4> <p>The Final Rule does not affect a business's ability to enforce a non-compete clause if the violation occurred prior to the Final Rule's effective date. Additionally, the Final Rule does not prohibit the enforcement of a non-competition clause if the party bringing the enforcement action has a good-faith basis to believe that the Final Rule is inapplicable.</p> <h4>8. Are non-competes allowed as part of the sale of a business?</h4> <p>Yes. The Final Rule expressly allows a non-competition clause to prohibit a seller from competing with a buyer in connection with the sale of a business. However, key employees who are not sellers but whose employment is expected to continue after the sale of a business cannot be bound by non-competition agreements under the Final Rule.</p> <h4>9. If the Final Rule survives legal challenges and goes into effect, how will it be enforced?</h4> <p>The FTC is the only entity that can enforce the Act and its civil penalty. At the same time, private parties can raise the Final Rule in a declaratory judgment action or as an affirmative defense to void prohibited agreements.</p> <h4>10. What should I do now?</h4> <p>Right now, employers do not need to take immediate action to comply with the Final Rule. It may be several weeks before an injunction decision is issued. At the same time, even in the absence of the Final Rule, enforcing non-competition agreements is becoming increasingly harder in many states and impossible in others. Employers should take this time to review all their restrictive covenant agreements to ensure that they are appropriately and narrowly tailored to comply with state laws and are no broader than necessary to protect their competitive advantage and confidential information.</p> <p>If you have questions concerning the FTC's ruling, please reach out to <a href="/David-Gevertz">David Gevertz</a>, <a href="/hannah-jarrells">Hannah Elizabeth Jarrells</a>, <a href="/katherine-i-funk">Katherine I. 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