The Final Rule declares most non-competes an unfair method of competition, in violation of Section 5 of the FTC Act.

In its April 23, 2024, open meeting, the Federal Trade Commission (FTC) voted 3-2 to issue a final rule (the Final Rule) effectively banning most non-compete clauses nationwide as an unfair method of competition. The Final Rule exempts non-compete clauses that are connected to a bona fide sale of a business and allows for continued enforcement of non-compete clauses entered into with senior executives prior to (but not those entered into after) the Final Rule takes effect. The FTC’s vote on the Final Rule split along party lines, with both Republican commissioners voicing dissent.