On April 23, 2024, the Federal Trade Commission (FTC) announced issuance of a final rule that will ban noncompetes for most workers. But if you're a Maryland worker, you can't ignore your noncompete—at least, not yet. There are two main reasons for this:
The noncompete ban isn't effective yet. Despite the headlines, the final FTC rule banning noncompetes won't be effective until 120 days after it's published in the Federal Register (when it is, you'll find it at 16 C.F.R. §§ 910.1 to 910.6). The final rule won't be effective until, at earliest, September.
The noncompete ban will face legal challenges. The US Chamber of Commerce has already called the final FTC rule "blatantly unlawful," and we expect that the final rule will (1) immediately be challenged in court, and (2) may take years to reach its final, post-litigation form.
So, for now, comply with your noncompete (or contact us if you think your noncompete may be unenforceable). Also, if you are a "senior executive," you should know that the FTC's noncompete ban won't apply to your existing noncompete. The final rule defines a senior executive as a worker:
in a policy-making position; and,
earning at least $151,164 in the last year (or annualized, if you've only worked a partial year).
The Employment Law Center of Maryland, along with the National Employment Lawyers Association, strongly supports the FTC's noncompete ban. Noncompetes exploit workers, prevent competition, and limit innovation. And while the "ban on noncompetes" you're seeing in the headlines isn't real yet, it does represent something important—a step in the right direction.
If you're a Maryland worker with a noncompete issue, we're here to help. Contact us today.
This blog post was first published by Executive Director and General Counsel Joseph Gibson, Esq., on April 24, 2024.
