By Valeria Zega and Petra D’Andrea – Department of Global Mobility
The Federal Trade Commission (FTC), the U.S. federal agency responsible for antitrust and consumer protection, has recently issued a ban on non-compete agreements in U.S. employment relationships.
This ban will take effect on September 4, 2024, and will apply to the vast majority of companies operating in the United States, excluding those outside the jurisdiction of the FTC.
The ban does not allow exceptions for future agreements and will also have a significant retroactive impact: all existing non-compete agreements, except those involving senior executive positions, will be rendered ineffective.
The FTC’s intervention in regulating non-compete agreements is unprecedented, and the newly introduced ban has generated much criticism and pending litigation.
We will closely monitor the developments and decisions of U.S. courts. In the meantime, we outline below the main operational steps that companies should consider to comply with the current regulations:
- Determine whether your company falls under the ban’s application;
- Identify and analyze all employment contracts containing non-compete clauses/agreements that may conflict with the newly introduced ban;
- Identify existing employment contracts with senior executives exempt from the ban’s application;
- Comply with the obligation to inform employees of the enforcement of the ban through appropriate notification;
- Review employment contracts to ensure their compliance with the new rule introduced by the FTC while effectively protecting the company’s commercial interests.
Our services
Bacciardi Partners can assist your company in assessing existing non-compete agreements and in identifying and suggesting possible alternative solutions to implement, in light of the recently introduced ban.
We invite you to contact us directly at +39 0721 371139 or via email at segreteria@bacciardistudiolegale.it for more information or clarifications.