On June 11, 2024, Today’s General Counsel published an article from Atlanta-based Founding Partner Nate Chapman that discusses the Federal Trade Commission (FTC) proposed rule to ban employers from requiring non-compete agreements for their employees. Chapman co-authored this article with Jay Ferguson, Chief Legal Officer at Randstad North America.

“Importantly, the final rule would apply retroactively to employees and independent contractors who have already signed non-competes with their employers. Upon the rule’s effective date (September 4, 2024), companies will be required to notify their employees and former employees with existing non-compete agreements that they will not enforce the non-competes,” Chapman wrote.

Chapman and Ferguson outlined the current arguments about banning non-competes, they explained, “When a company is secure that its interests will be protected, they are more likely to invest in and train its employees and allow employees access to sensitive confidential information and trade secrets. As a result, most common law jurisdictions have enforced non-competes to some degree for centuries, and, in most states, non-competes are enforceable by state statute or common law to the extent they protect the legitimate business interests of a company.”

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