FEDERAL TRADE COMMISSION FTC.GOV 3
• Functionally prevents: Terms and conditions that aren’t labeled as
noncompetes but are so restrictive that they effectively prevent a worker from
getting a new job or starting a business.
Is there something different about how noncompetes with senior executives are
treated under the Rule?
Yes. After September 4, 2024, when the Rule is set to go into effect, you can’t
enter into a new non-compete with any worker covered by the Rule—that
includes senior executives. However, an existing non-compete with a senior
executive is still valid. In contrast, for workers other than senior executives, you
cannot enforce existing non-competes after the effective date, set to be on
September 4, 2024, and you must give these workers notice that their non-
competes will not be enforced.
How is senior executive defined?
A worker is a senior executive if they earn more than $151,164 in compensation
a year and are in a “policy-making position.” Compensation can include salary,
commissions, performance bonuses and any other compensation agreed to that
the worker knows and can expect, but does not include items like benefits or
board and lodging. If the worker worked only for part of the year, you can
annualize their earned compensation to see if they meet the threshold. Policy-
making position includes the president, CEO, or someone else with authority to
make policy decisions for the entire company.
Do I need a lawyer to comply with the Rule?
No. You can always consult a lawyer if you want to, but the 3 steps to comply are
all most businesses must do to comply with this Rule.
What if I don’t use noncompetes?
You don’t need to take any steps to comply with this Rule. Just make sure you
don’t use noncompetes in the future.
Can I send an all-staff email using the model language and meet the notice
requirement for my current workers?
Yes, an all-staff email with the model language meets the requirement. You can
send an all-staff email even if you use noncompetes only for some workers.
Is the model language available in any languages other than English?
Yes. The model language has been translated into Spanish, Arabic, Tagalog,
Simplified Chinese, Vietnamese, and Korean. You can include any of those
translated versions alongside the English version.