Federal Trade Commission rule on non-compete clauses

In April, the Federal Trade Commission approved a final rule that non-compete clauses are an unfair method of competition. Therefore, after its effective date (which will be 120 days after publication in the Federal Register), non-compete agreements with workers will no longer be enforceable and workers must be notified of this. Existing non-compete agreements with senior executives (as defined) will continue to be enforceable. However, new non-competes cannot be created, except as it relates to non-compete arrangements between buyers and sellers of a business. Companies with intangible assets related to existing employee non-compete agreements that do not meet the exceptions should consider the appropriate useful life for such assets.