Banning Non-Compete Clause Rule in American Law Foundational Analytical Study

Hashish, Esraa

doi:10.21608/ijdjl.2024.328185.1265

Banning Non-Compete Clause Rule in American Law Foundational Analytical Study

Document Type : Original Article

Author

Esraa Hashish

Alexandria law School

10.21608/ijdjl.2024.328185.1265

Abstract

The rising use of non – Compete Clause (NCC) or covenant not to compete in United States in employment contracts, which is a clause that states an employee will neither work for a competitor nor start a competing business within a certain time and geographical region, as employers use such clause to protect themselves from employees taking trade secrets or other information to compete firms, results in a call for “Banning noncompete clauses” by Uniform Law Commission 2021 through its “UREAA” or the “Act” and by Federal Trade Commission (FTC) 2024 through its “Final Rule” which banned all forms of noncompete clauses and it will be enforceable after the effective date 4/9/2024.
UREAA regulates all restrictive post-employment agreements including noncompete agreements and confidentiality agreements, and it prohibits noncompete agreements and all other restrictive agreements for low wages workers. FTC’s new rule (Art. 910/2) make it illegal for an employer to enter into a noncompete rule with a worker or to maintain a noncompete with a worker.
This study will be divided into:
Introduction: Historical background about noncompete clause.
Chapter One: Banning Noncompete clause in UREAA.
Chapter Two: Banning Noncompete clause in FTC.
Chapter Three: Banning Noncompete clause in United States labour laws.

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