Skip to the main content.
New! Continuous MVR monitoring
Driving record monitoring

Ongoing monitoring of driving records can help employers avoid risk and improve driver safety. Learn about the benefits of adding Verified Credentials' newest solution to your screening strategy.

Read the blog ›

Featured resource

Industry-Trends-Report-01

Learn the latest trends in employment background checks. This report uses real-life usage data to uncover how employers are screening across industries.

Download the full report ›

Verified Credentials is a leading background screening company. Since 1984, we’ve helped validate and secure relationships through the use of our comprehensive screening solutions. We offer a wide variety of background checks, verifications, and innovative screening tools.

Get to know us ›

Accredited background screening solutions

Logo-PBSA-Accreditation-120x98

Our accreditation confirms that our policies, processes, and employee training meet rigorous industry compliance standards.

Learn about our solutions ›

1 min read

Federal Trade Commission Issues Final Rule on Noncompetes

On April 23, 2024, by a 3 to 2 vote, the Federal Trade Commission (FTC) issued a final rule to “promote competition by banning noncompetes nationwide, protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.”

In the final rule, the FTC stated that it is an unfair method of competition to require employees to enter into noncompete agreements with their employers and for employers to enforce certain noncompetes.

 

What exactly does the final rule prohibit?

Once in effect, the final rule prohibits employers from establishing new noncompete agreements.

For noncompete agreements in effect prior to the final rule's effective date, employers will be prohibited from enforcing or attempting to enforce a noncompete unless the employee is a "senior executive." The FTC defines a senior executive as a worker earning more than $151,164 annually and in a policy-making position.

Additionally, under the final rule, employers must notify workers with existing noncompete agreements. The notice must disclose that their noncompete agreement will not—and cannot—be enforced against them. The FTC published a model notice to simplify compliance with this notice requirement, Figure 1 to Section 910.2(b)(4) on page 566 of the final rule.

A copy of the final rule can be found here.

 

When does the final rule take effect?

The final rule is scheduled to take effect 120 days after its publication in the Federal Register. However, several legal challenges have already been filed against it in court, which could postpone or prohibit its enforcement.

 

What does this mean for employers?

The success of the pending legal challenges is uncertain, which means whether (and when) the final rule takes effect is also unknown. Nevertheless, employers should be given plenty of time to prepare if the rule does take effect.

Proactive employers may wish to consult their legal counsel and review their noncompete practices to assess why they use noncompete agreements and consider alternatives. For example, the FTC found that trade secret laws and non-disclosure agreements can be alternatives to protecting a company’s proprietary and other sensitive information. In addition, the FTC suggests that employers who want to retain workers can do so by improving their wages and working conditions.

Verified Credentials will monitor and provide updates on this issue as it evolves.

Employment Fairness Act for Returning Citizens in Prince George’s County, MD

The Prince George's Employment Fairness Act for Returning Citizens is a new law in Prince George's County, Maryland, designed to provide fair...

Read More

Colorado’s Clean Slate Act Goes into Effect

As of July 1, 2024, Colorado’s Clean Slate Act, or Senate Bill 22-099, is officially in effect.This comes in the wake of several other states that...

Read More

Texas Attorney General Forms Privacy Task Force

The Texas Attorney General’s office has recently announcedthe formation of a dedicated task force within its Consumer Protection Division. This task...

Read More

LA County’s 2024 Fair Chance Ordinance for Employers

Los Angeles County has introduced a new Fair Chance Ordinance for employers, effective September 3, 2024. Previously, we tracked other Fair Chance...

Read More

Federal “Fair Chance Act” Now in Effect

“Ban the Box” style laws are a trend that has grown exponentially over the last decade. In fact, we have covered several laws in multiple...

Read More

Federal “Fair Chance Act” Enacted

We have previously covered “Ban the Box” laws in multiple jurisdictions, including both statewide laws, such as the law in Colorado, and municipal...

Read More