FTC bans noncompete clauses, declares vast majority unenforceable

Enlarge / Federal Trade Commission Chair Lina Khan talks with guests during an event in the Eisenhower Executive Office Building on April 03, 2024 (credit: Getty Images | Chip Somodevilla )

The Federal Trade Commission (FTC) today announced that it has issued a final rule banning noncompete clauses. The rule will render the vast majority of current noncompete clauses unenforceable, according to the agency.

“In the final rule, the Commission has determined that it is an unfair method of competition and therefore a violation of Section 5 of the FTC Act, for employers to enter into noncompetes with workers and to enforce certain noncompetes,” the FTC said.

The US Chamber of Commerce said it will sue the FTC in an effort to block the rule, claiming the ban is “a blatant power grab that will undermine American businesses’ ability to remain competitive.”