Today the Federal Trade Commission voted 3-2 to approve a Final Rule that, absent a successful legal challenge, will ban most noncompete agreements in the United States beginning 120 days after publication in the Federal Register.

Key provisions in the Final Rule are as follows:

• New noncompetes
  • Banned for all workers, including “senior executives,” following the effective date.
  • “Senior executive” is defined as a worker who was in a policy-making position and has annualized compensation exceeding $151,164.
  • Sale of business exception.
• Existing noncompetes
  • May remain in effect after effective date for senior executives.
  • Unenforceable for all other workers after the effective date.

We expect immediate legal challenges to be filed in court tomorrow.

Our detailed analysis will follow later today.