On April 23, the Federal Trade Commission (FTC) issued a final rule prohibiting the use and enforcement of most noncompete agreements. The rule is scheduled for publication in the Federal Register on May 7 and slated to go into effect on Sept. 4. However, it does face some headwinds with lawsuits already being filed, challenging its validity. 

A new video featuring Nathan Riedel, Big “I" senior vice president for federal government affairs, joined by Wes Bissett, Big “I" senior counsel for government affairs, explains the rule, its effect on independent agents and the current state of play.

The rule targets employment agreements that prohibit, penalize or effectively prevent a worker from seeking or accepting work elsewhere or operating a business after leaving a particular job.

Among the agreements that would be banned are those that expressly prohibit a person from working elsewhere; those that require a person to pay liquidated damages to do so; and severance agreements in which a person is paid only if they refrain from competing against a former employer.

Once the rule takes effect, the regulation will ban for-profit employers from utilizing such agreements, terms or conditions and will prohibit their enforcement or attempted enforcement in most instances.

Reach out to the Big “I" government affairs team for more information. 

Nathan Riedel is Big “I" senior vice president, federal government affairs.