On April 23, 2024, the Federal Trade Commission (FTC) announced a final rule that would ban most noncompete agreements. Touting that the rule “will generate over 8,500 new businesses each year, raise worker wages, lower health care costs, and boost innovation,” the FTC estimated that approximately 30 million employees are subject to noncompete agreements.

The rule caveats employer’s existing noncompetes with senior executives, permitting them to remain in force. However, all other noncompetes will be ineffective after the 120-day period after the publication of the final rule expires. Faced with this, many companies are rushing to find other ways to protect their clientele and trade secrets from being poached by exiting employees. The rule is expected to face stiff opposition in the courts.