--- title: How to Prep for the FTC’s Noncompete Ban description: The Federal Trade Commission voted to issue a final rule to prohibit noncompete clauses for most employees, effective September 4, 2024. The FTC aims to image: https://blog.nisbenefits.com/hubfs/blog-headers/noncompete-b.jpg --- ![How to Prep for the FTC’s Noncompete Ban](https://blog.nisbenefits.com/hubfs/blog-headers/noncompete-b.jpg) # How to Prep for the FTC’s Noncompete Ban - Home - [Employee Benefit News for School, City and County Employers](https://blog.nisbenefits.com) - How to Prep for the FTC’s Noncompete Ban [ Rick Labian ](https://blog.nisbenefits.com/author/rick-labian) 05/15/2024 [ Legislative News](https://blog.nisbenefits.com/topic/aca-other-legislative-news) [0 Comments ](https://blog.nisbenefits.com/noncompete-ban-prep#postComment) 1 Minutes *2 minute read* On April 23, 2024, the Federal Trade Commission (FTC) voted to issue a final rule to prohibit noncompete clauses for most employees, effective September 4, 2024. The FTC aims to promote competition by protecting workers' job mobility, boosting innovation, and encouraging new business creation.   ## **Noncompete Ban Overview** ### **Background** A noncompete clause is a contract term that restricts a worker from joining a competitor or starting a similar business within a specific area and time frame after leaving their job. The enforceability of such clauses is currently determined by state laws and courts. In January 2023, the FTC proposed a rule to regulate noncompete clauses at the federal level. The final rule was issued on April 23, 2024, to take effect on September 4, 2024.   ### **Key Points in the Noncompete Ban** The FTC has voted to ban most noncompete clauses, including new ones for all workers except senior executives. The rule applies to current and former workers, prohibiting post-employment noncompetes but allowing restrictions while employed. The rule does not apply to banks, savings institutions, credit unions, carriers, airlines, and certain nonprofits. The final rule deems using noncompete clauses in violation as an unfair competition practice under the FTC Act. The FTC can enforce it through actions or litigation. Employees can seek court judgments to invalidate illegal noncompetes, with employers facing additional damages for enforcement attempts.   ## **Steps to Prepare for the Noncompete Ban Action Steps** ### ** ****Audit Existing Employment Agreements and Employer Policies** Employers should audit existing agreements, handbooks, and policies for noncompete clauses that may prevent employees from accepting other job offers.   ### **Prepare Communications for Affected Employees** Employees should be notified by their employers that their noncompete clauses will not be enforced. They can use model language and send it via email to all employees, including former ones.   ### **Consider Noncompete Alternatives** Employers may explore alternatives to noncompete agreements, such as confidentiality and nonsolicitation agreements, fixed-term employment agreements, and garden leave provisions. It is important to work with local counsel to understand the risks and enforceability of these options.   ### **Prioritize Employee Retention** Employers can enhance employee retention by offering long-term incentives like equity awards or deferred compensation. They may also provide more competitive compensation packages and employee benefits than competitors.   ### **Prepare for Uncertainty** Employers preparing for the FTC's ban on noncompetes should monitor legal challenges and ambiguities in the final rule. Additional clarification may be needed before implementing any changes. Download the [bulletin](https://blog.nisbenefits.com/hubfs/blog-supporting-docs/bulletin-ftc-ban-noncompetes.pdf) for more details.   #### **Additional Resources** [Fact Sheet on Noncompete Rule](https://www.ftc.gov/system/files/ftc_gov/pdf/Non-Compete-Fact-Sheet.pdf) [Business and Small Entity Compliance Guide](https://www.ftc.gov/system/files/ftc_gov/pdf/Business-and-Small-Entity-Compliance-Guide-updated.pdf)   --- #### Tag: [ Legislative News](https://blog.nisbenefits.com/topic/aca-other-legislative-news) #### Share: - [Follow us on Facebook ](http://www.facebook.com/share.php?u=https://blog.nisbenefits.com/noncompete-ban-prep) - [Follow us on Twitter ](https://twitter.com/intent/tweet?url=https://blog.nisbenefits.com/noncompete-ban-prep&text=How%20to%20Prep%20for%20the%20FTC’s%20Noncompete%20Ban) - [Follow us on Linkedin ](http://www.linkedin.com/shareArticle?mini=true&url=https://blog.nisbenefits.com/noncompete-ban-prep) - [Follow us on Pinterest ](http://pinterest.com/pin/create/button/?url=https://blog.nisbenefits.com/noncompete-ban-prep&text=How%20to%20Prep%20for%20the%20FTC’s%20Noncompete%20Bandescription=2%20minute%20read%20On%20April%2023,%202024,%20the%20Federal%20Trade%20Commission%20(FTC)%20voted%20to%20issue%20a%20final%20rule%20to%20prohibit%20noncompete%20clauses%20for%20most%20employees,%20effective[...]&media=https://info.nisbenefits.com/hubfs/blog-headers/noncompete-b.jpg) --- [ #### Final Guidance Issued to Prevent Workplace Harassment ##### Previous Post ](https://blog.nisbenefits.com/final-guidance-workplace-harassment) [#### HSA and HDHP Limits Increase for 2025 ##### Next Post ](https://blog.nisbenefits.com/hsa-hdhp-limits-increase-2025) ### Leave a Reply This is a search field with an auto-suggest feature attached. - 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