If you recall, the Federal Trade Commission has dealt a major blow to restrictive employment practices. A landmark new rule banning non-compete clauses for most American workers. This rule finally goes into effect September 4th!
“Game Changer: Non-Compete Clauses Get the Boot!”
That’s right, employers can no longer shackle their employees with agreements that limit their future career opportunities. This seismic shift opens up the job market and empowers workers to pursue their dreams without fear of legal repercussions.
Most workers, including employees and independent contractors, are now free from these restrictive agreements. However, the rule does carve out an exception for senior executives earning over $151,164 annually and in policy-making roles. Employers can still enforce existing non-compete clauses with senior executives, but they can’t enter into new ones after the rule takes effect.
What does this mean for you?
If you’re an employee or independent contractor, as of September 4th 2024, you’re likely no longer bound by a non-compete agreement. This means more freedom to explore new opportunities and pursue your career goals without fear of legal consequences. If you would like more information you can find out more here.
Don’t be fooled by unscrupulous employers!
The Loophole? While the rule explicitly bans non-competes, it doesn’t directly address non-disclosure agreements (NDAs), customer non-solicitation agreements, or employee non-solicit agreements.
The FTC has made it clear that these other types of agreements can still be considered illegal if they have the same practical effect as a non-compete. For instance, an NDA that covers a vast amount of information could essentially prevent a worker from finding a new job in the same field.
If you’re an employee or independent contractor, it’s crucial to carefully review any NDAs, non-solicitation agreements, or other restrictive covenants you’re asked to sign. If these agreements seem overly broad or restrictive, they could still be considered illegal under the new rule.
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