FTC Issues Ban on Non-Compete Clauses in Most Employment Agreements

The Federal Trade Commission (FTC) recently issued a final rule that, among other things, bans non-compete clauses that prohibit a worker from pursuing certain employment after their contract with an employer ends.

The final rule provides that it is an unfair method of competition for persons to enter into non-compete clauses with workers on or after the final rule’s effective date. Moreover, for the majority of workers, existing noncompete agreements will not be enforceable after the effective date. The final rule does allow agreements entered prior to the effective date to remain in effect for senior executives earning more than $151,164 annually who are in policymaking positions. Employers will be required to provide notice to workers whose existing agreements are made ineffective by the final.

Lawsuits already are filed challenging the ban.

The American College of Radiology® (ACR®) welcomes feedback about how the new rule is likely to affect members and their practice. If you have questions or would like to provide feedback, contact Gloria Romanelli, ACR Senior Director, Legislative and Regulatory Relations and Legal Counsel, Quality and Safety.

The rule takes effect 120 days after publication in the Federal Register. The FTC provides model language employers can use to communicate changes to workers.