FTC Non-Compete Clause Rulemaking
In January of 2023, the Federal Trade Commission (FTC) issued a proposed rule banning all non-compete agreements nationwide. A comment period for the public to respond was opened and over 26,000 comments were submitted. In response to the FTC’s proposed rule to ban non-compete agreements, CAPIGENT’s founder, Ms. Overstreet, submitted a formal comment letter influencing key amendments to the final ruling:
On April 23, 2024, the Federal Trade Commission (FTC) issued a rule banning nearly all non-compete agreements nationwide.
The rule was published in the Federal Register on May 7, 2024. In this ruling, only two changes were made from the proposed ruling:
Removal of an ownership % threshold in the M&A exception (proposed rule required an individual to have at least a 25% ownership interest in order to be subject to a non-compete agreement)
Allowed existing non-compete agreement for “Senior Executives” to remain in force. This carve out did not exist in the Proposed Rule.