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Updates on Non-Compete Rule-making

Our firm is committed to keeping you updated on the recent development regarding Non-Compete Clauses. The FTC’s proposed rule issued on January 5, 2023, would make significant changes resulting in a total ban on non-compete agreements.

Under the proposed rule, employers must provide notice via individualized communication to the worker that the clause is no longer in effect and unenforceable against the worker. Notice must be provided within 45 days of rescinding the non-compete clause to the employee and the employer the worker currently works for. The proposed rule provides model language that satisfies that notice requirement. Furthermore, the proposed rule includes a strict recision clause for existing non-compete agreements between parties that were enacted prior to the compliance date.

These changes could have a significant impact on how non-compete agreements are used by employers and enforced by courts. It is important for employers like you to stay up to date on the status of the proposed rule and to review your current non-compete agreements to ensure compliance with any new regulations. This is why TLF will keep you informed on any further updates regarding changes in the law.

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