FTC’s Sweeping Non-Compete Ban: Summary, States’ Views, and Litigation Challenges

On April 23, 2024, the FTC voted 3-2 to adopt a final rule banning the use of non-compete agreements nationwide, impacting 30 million workers by the FTC’s own estimates. This near categorical ban on the non-compete agreements is a contrast from a regime in which these agreements had been recognized to have potential procompetitive value and therefore were reviewed for reasonableness. It also marks a departure from the state law in many jurisdictions. Less than 24 hours after the vote, two lawsuits have challenged the rule based on statutory and Constitutional grounds. This breaking news panel discussed the final rule, grounds for statutory and Constitutional challenges, and state AG reactions.