On August 20, 2024, the FTC sent out a short email reminding the country that most noncompete agreements are going away on September 4, 2024.
1. No noncompetes in the future.
2. Give notice that noncompetes are unenforceable.
3. Do not enforce existing noncompetes.
The email reads:
To whom it may concern:
Thank you for your participation in the Federal Trade Commission’s (FTC) noncompete rulemaking process. Following the comment process, the FTC finalized a ban on most noncompete agreements. The final rule is scheduled to go into effect on September 4, 2024.
In advance of the September 4 effective date, we are writing to share compliance information and resources. There are just 3 easy steps to comply with the rule:
First, do not include noncompetes in future employment contracts, paperwork, websites, or other materials. This applies to all workers, including senior executives.
Second, if you have active noncompetes, give notice to those current and former workers who are not senior executives that their noncompetes are unenforceable. You can use model notices provided on our website here.Notice can be provided via your choice of email, text, or on paper. If you don’t have contact information for a former worker, you don’t have to send them the notice. You can choose to use a mass, all-staff email to provide the model notice, even if you use noncompetes only for some workers.
Third, do not enforce already existing noncompetes going forward for workers other than senior executives.
For more information, please visit www.ftc.gov/noncompetes, where you’ll find a Compliance Guide for Businesses and Small Entities (including FAQs), a Compliance Webinar, Model Notices, a Fact Sheet on the FTC’s Noncompete Rulemaking, and more.
Court rulings to date have allowed the rule to come into general effect on September 4. The FTC will provide an update on its website if there are widely applicable changes to the effective date in the future.
For additional questions, you can contact the FTC at noncompete@ftc.gov.
Sincerely,
FTC Staff