On April 23, the Federal Trade Commission (FTC) issued the noncompete clause rule (final rule) that seeks to ban noncompete agreements with nearly all “workers.” The final rule becomes effective 120 days after publication in the Federal Register (effective date).

Who Is Impacted By This Ban?

The final rule benefits a “worker,” defined as a natural person “who works or who previously worked, whether paid or unpaid, without regard to the worker’s title or the worker’s status under any other state or federal laws.” The final rule is broader than the employer-employee relationship. A “worker” includes independent contractors, volunteers, externs, interns and even sole proprietors who provide services to a business.