The Federal Trade Commission (FTC) issued the Noncompete Clause Rule on Tuesday, calling for a comprehensive ban on noncompete agreements nationwide. The FTC concluded that noncompetes are an “unfair method of competition and therefore a violation of Section 5 of the Federal Trade Commission Act.”
Although the FTC has issued the rule, it is not effective until 120 days after publication in the Federal Register. Threats of legal challenge have already surfaced. Just hours after the 3-2 vote by the FTC to issue the final rule, the U.S. Chamber of Commerce announced it would sue the FTC to block the rule from going into effect.
