The FTC recently approved a comprehensive noncompete rule, setting a historic precedent. The rule states that noncompetes are an unfair method of competition and therefore a violation of Section 5 of the FTC Act. Once the final rule goes into effect, new noncompetes will be banned for all workers and existing noncompetes will be unenforceable for all workers except for senior executives. This opens up the door for employees to move from one company to another without having to wait for a certain period of time. 

Partner Reid Skibell spoke with HuffPost about what employers and employees can expect going forward, noting that he predicts more “golden handcuffs” tactics to be more widely used on senior employees. Reid pointed to the common practice of employers delaying bonuses until the first quarter of the next year to prevent employees from leaving, and loans that are only forgiven over a certain time that an employee remains employed.

In discussing an interesting aspect of the noncompete rule, Reid told IPWatchdog, “It will likely result in more creative ways to retain talent, including financial incentives or disincentives for key employees, and confidentiality and non-solicitation provisions for lower-level employees.”

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