The FTC's non-compete ruling - why it matters to employers and employees

A recent ruling from the United States Federal Trade Commission (FTC) essentially bans the use of non-compete agreements for most workers. The key question is whether this new ruling will stand should it get litigated.

A non-compete agreement has frequently been a requirement for certain jobs. Its use previously was limited to top executives but has expanded in recent years to include all kinds of workers (e.g., hair stylists). The intent of a non-compete agreement is to prohibit an employee or executive from leaving the firm to then work for a competitor. These agreements may bar the employee from going to a named competitor for a specific timeframe and may explicitly call out which firms an employee cannot take a job. These bans may last for a few months to many years. They may or may not apply to specific geographies, too. Jobseekers either accept these (one-sided) agreements or ...