Non-Competes: What You Need to Know

On April 23, 2024, a significant development occurred as the U.S. Federal Trade Commission approved a rule to abolish non-compete agreements. These agreements, frequently signed by workers, prohibit them from joining rival companies or launching competing ventures. While such agreements might appear justified in theory, they’ve increasingly encroached into lower-paying sectors like retail and fast food, hampering both worker mobility and wage growth.

The ban on non-compete agreements carries profound implications. By eliminating this practice, the FTC anticipates a substantial boost to worker earnings, projected at $488 billion, and the birth of over 8,500 new businesses annually. The ruling is set to take effect 120 days after its publication in the Federal Register.

Who’s Exempt

It’s crucial to understand that this decision isn’t a sweeping, immediate change. Existing non-competes for senior executives will remain intact. Senior executives, as defined by the FTC, earn over $515,164 annually and hold “policy-making” positions, representing a mere 0.75% of the workforce. However, employers won’t be able to impose new non-compete agreements.


The prohibition of non-compete agreements doesn’t mean former employees can recklessly disclose trade secrets. Currently, 95% of workers are already bound by Non-Disclosure Agreements (NDAs), which persist in safeguarding proprietary and sensitive information.

Learn more, directly from the FTC here

TL;DR: The U.S. Federal Trade Commission banned non-compete agreements on April 20234 aiming to boost worker earnings by $488 billion and create over 8,500 new businesses annually. Senior executives remain exempt, but new agreements are prohibited. Non-Disclosure Agreements (NDAs) continue to protect sensitive information.