Federal Trade Commission Bans Non-Compete Agreements, Includes Independent Contractors in Definition

The Federal Trade Commission (FTC) is banning non-compete agreements for all workers and has explained that non-compete agreements are “an unfair method of competition and therefore in violation of Section 5 of the Federal Trade Commission Act, for employers to enter into non-compete [agreements] with workers and to enforce certain non-compete [agreements].”

Under the final rule, employers will be prohibited from entering into new non-compete agreements with workers on or after the effective date of the rule.

The rule broadly defines workers to include “employees, independent contractors, interns, externs, volunteers, apprentices, or sole proprietors.”

NAR is currently reviewing the Commission’s ruling. Use this LINK to access NAR’s advocacy update on the issue and review the Commission’s FAQ here.