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
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