Yesterday, the FTC issued a significant rule regarding non-compete agreements. This is a nationally applicable rule.

In a nutshell, the FTC's rule aims to bring more transparency and fairness to non-compete agreements, ensuring they're used appropriately and not to stifle competition or restrict an employee's ability to change jobs. While this is a new rule nationally, any stricter rules under state law will still apply to those under such a state's jurisdiction.

Here are the basics to know about the new federal rule:

Non-competes must be tailored to protect legitimate business interests.
They should be disclosed before a job offer is accepted.
Employees should have ample time to review and seek legal advice.
Unreasonable restrictions could face scrutiny.
Employers should review past non-compete agreements and may need to notify employees of the new rule's effect on them.

The rule goes into effect in 120 days. We expect legal challenges to be filed in federal courts to invalidate or limit this new rule, so stay tuned!

Nebraska employers who are abiding by Nebraska legal requirements for their non-compete and non-solicitation agreements are likely already compliant with this new federal rule. Nebraska has long required that non-competes be narrowly focused, permitting employers to prohibit from soliciting customers, clients, vendors, and employees for a limited period after their departure. Nebraska courts will not enforce generalized non-competes that amount to industry bans. Of course, some nuances could affect a particular employer or employee differently, and legal advice should always be sought.

The FTC's press release is available here: FTC Announces Rule Banning Non-competes | Federal Trade Commission.

At ES Law, we're committed to helping you stay compliant and navigate these changes smoothly. Contact us today to ensure your non-compete agreements align with the latest regulations.