How to Comply with the FTC Ban on Non-Compete Agreements

As we indicated in an earlier Client Alert on April 24, 2024, the Federal Trade Commission has issued a
new rule that will ban non-compete agreements for all employers in the United States, with certain limited exceptions. The new rule remains on track to take effect on September 4, 2024. There have been legal challenges to the non-compete ban, but they have been unsuccessful in securing an order invalidating the non-compete ban for all employers.

If the ban is not enjoined before September 4, employers will be required to send a clear notice to
affected workers on or before September 4 that their non-compete covenants will not and cannot be legally enforced.

Employers who violate the rule may face a range of penalties, including fines up to $10,000 per offense.
We therefore advise you to work with counsel to review existing non-competes with current and former
employees and to provide the required notices prior to September 4.

Contacting Pavia & Harcourt LLP

Questions regarding matters discussed in this publication may be directed to Adam Mitzner at
amitzner@pavialaw.com.

About Pavia & Harcourt LLP

Established in 1951, Pavia & Harcourt LLP is a business law firm concentrating in international
commercial and corporate transactions, banking, media and entertainment, real estate, litigation and
arbitration, intellectual property, estate planning and administration, and matrimonial law. We are based
in New York City.

This publication by Pavia & Harcourt LLP is for information purposes only. It does not constitute legal or other professional advice or opinions on specific facts or matters, nor does its distribution establish an attorney-client relationship. This material may constitute Attorney Advertising as defined by the New York Court Rules. As required by New York law, we hereby advise you that prior results do not guarantee a similar outcome.