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What Louisiana Businesses Should Do in Preparation for the FTC's Nationwide Ban On Non-Compete Agreements

The Federal Trade Commission (“FTC”) issued its final rule on April 23, 2024, banning all future non-compete agreements between employers and workers. The rule also bans all existing non-compete agreements between employers and workers, except those existing agreements with senior executives, earning greater than $151,164 annually, in policy-making positions. These senior executives with existing agreements are excluded from the ban. Future agreements with such senior executives, however, are included in the ban.

“Worker” is broadly defined as an employee, independent contractor, extern, intern, volunteer, apprentice, a sole proprietor, whether paid or unpaid, who provides a service to a person.

For existing non-compete agreements that are subject to the ban, the rule requires notice be given to each worker no later than September 4, 2024, the effective date of the final rule. The notice requires the person who entered into the non-compete agreement with the worker to provide clear and conspicuous notice that the worker’s non-compete clause will not be and cannot legally be enforced. The FTC rule requires that the notice be provided by hand delivery to the worker, or by mail at the worker’s last known personal street address, or by email to an email address belonging to the worker, or by text message to a mobile telephone number belonging to the worker. Employers must be diligent in providing the notice requirements in the form required to workers with existing non-compete agreements prior to September 4, 2024.

While the ban is being challenged in court and may never take effect, what should a Louisiana business do if the rule becomes effective on September 4, 2024? La. R.S. 23:921, the single statute in Louisiana controlling the validity of non-compete agreements, allows an employer to enter into both, or either, a non-compete agreement or non-solicitation of customers agreement. While the FTC’s nationwide ban on non-compete agreements prohibits future non-compete agreements in Louisiana, it does not appear to prohibit non-solicitation agreements between employers and employees. While a non-compete agreement prohibits an ex-employee from competing in the industry, a non-solicitation agreement allows an ex-employee to compete, but not to solicit their former employer’s customers in doing so. Louisiana businesses need to seriously consider protecting their business by using non-solicitation of customers agreements with their employees to avoid the FTC’s nationwide ban.

What Louisiana Businesses Should Do in Preparation for the FTC's Nationwide Ban On Non-Compete Agreements

The Federal Trade Commission (“FTC”) issued its final rule on April 23, 2024, banning all future non-compete agreements between employers and workers. The rule also bans all existing non-compete agreements between employers and workers, except those existing agreements with senior executives, earning greater than $151,164 annually, in policy-making positions. These senior executives with existing agreements are excluded from the ban. Future agreements with such senior executives, however, are included in the ban.

“Worker” is broadly defined as an employee, independent contractor, extern, intern, volunteer, apprentice, a sole proprietor, whether paid or unpaid, who provides a service to a person.

For existing non-compete agreements that are subject to the ban, the rule requires notice be given to each worker no later than September 4, 2024, the effective date of the final rule. The notice requires the person who entered into the non-compete agreement with the worker to provide clear and conspicuous notice that the worker’s non-compete clause will not be and cannot legally be enforced. The FTC rule requires that the notice be provided by hand delivery to the worker, or by mail at the worker’s last known personal street address, or by email to an email address belonging to the worker, or by text message to a mobile telephone number belonging to the worker. Employers must be diligent in providing the notice requirements in the form required to workers with existing non-compete agreements prior to September 4, 2024.

While the ban is being challenged in court and may never take effect, what should a Louisiana business do if the rule becomes effective on September 4, 2024? La. R.S. 23:921, the single statute in Louisiana controlling the validity of non-compete agreements, allows an employer to enter into both, or either, a non-compete agreement or non-solicitation of customers agreement. While the FTC’s nationwide ban on non-compete agreements prohibits future non-compete agreements in Louisiana, it does not appear to prohibit non-solicitation agreements between employers and employees. While a non-compete agreement prohibits an ex-employee from competing in the industry, a non-solicitation agreement allows an ex-employee to compete, but not to solicit their former employer’s customers in doing so. Louisiana businesses need to seriously consider protecting their business by using non-solicitation of customers agreements with their employees to avoid the FTC’s nationwide ban.

What Louisiana Businesses Should Do in Preparation for the FTC's Nationwide Ban On Non-Compete Agreements

The Federal Trade Commission (“FTC”) issued its final rule on April 23, 2024, banning all future non-compete agreements between employers and workers. The rule also bans all existing non-compete agreements between employers and workers, except those existing agreements with senior executives, earning greater than $151,164 annually, in policy-making positions. These senior executives with existing agreements are excluded from the ban. Future agreements with such senior executives, however, are included in the ban.

“Worker” is broadly defined as an employee, independent contractor, extern, intern, volunteer, apprentice, a sole proprietor, whether paid or unpaid, who provides a service to a person.

For existing non-compete agreements that are subject to the ban, the rule requires notice be given to each worker no later than September 4, 2024, the effective date of the final rule. The notice requires the person who entered into the non-compete agreement with the worker to provide clear and conspicuous notice that the worker’s non-compete clause will not be and cannot legally be enforced. The FTC rule requires that the notice be provided by hand delivery to the worker, or by mail at the worker’s last known personal street address, or by email to an email address belonging to the worker, or by text message to a mobile telephone number belonging to the worker. Employers must be diligent in providing the notice requirements in the form required to workers with existing non-compete agreements prior to September 4, 2024.

While the ban is being challenged in court and may never take effect, what should a Louisiana business do if the rule becomes effective on September 4, 2024? La. R.S. 23:921, the single statute in Louisiana controlling the validity of non-compete agreements, allows an employer to enter into both, or either, a non-compete agreement or non-solicitation of customers agreement. While the FTC’s nationwide ban on non-compete agreements prohibits future non-compete agreements in Louisiana, it does not appear to prohibit non-solicitation agreements between employers and employees. While a non-compete agreement prohibits an ex-employee from competing in the industry, a non-solicitation agreement allows an ex-employee to compete, but not to solicit their former employer’s customers in doing so. Louisiana businesses need to seriously consider protecting their business by using non-solicitation of customers agreements with their employees to avoid the FTC’s nationwide ban.

What Louisiana Businesses Should Do in Preparation for the FTC's Nationwide Ban On Non-Compete Agreements

The Federal Trade Commission (“FTC”) issued its final rule on April 23, 2024, banning all future non-compete agreements between employers and workers. The rule also bans all existing non-compete agreements between employers and workers, except those existing agreements with senior executives, earning greater than $151,164 annually, in policy-making positions. These senior executives with existing agreements are excluded from the ban. Future agreements with such senior executives, however, are included in the ban.

“Worker” is broadly defined as an employee, independent contractor, extern, intern, volunteer, apprentice, a sole proprietor, whether paid or unpaid, who provides a service to a person.

For existing non-compete agreements that are subject to the ban, the rule requires notice be given to each worker no later than September 4, 2024, the effective date of the final rule. The notice requires the person who entered into the non-compete agreement with the worker to provide clear and conspicuous notice that the worker’s non-compete clause will not be and cannot legally be enforced. The FTC rule requires that the notice be provided by hand delivery to the worker, or by mail at the worker’s last known personal street address, or by email to an email address belonging to the worker, or by text message to a mobile telephone number belonging to the worker. Employers must be diligent in providing the notice requirements in the form required to workers with existing non-compete agreements prior to September 4, 2024.

While the ban is being challenged in court and may never take effect, what should a Louisiana business do if the rule becomes effective on September 4, 2024? La. R.S. 23:921, the single statute in Louisiana controlling the validity of non-compete agreements, allows an employer to enter into both, or either, a non-compete agreement or non-solicitation of customers agreement. While the FTC’s nationwide ban on non-compete agreements prohibits future non-compete agreements in Louisiana, it does not appear to prohibit non-solicitation agreements between employers and employees. While a non-compete agreement prohibits an ex-employee from competing in the industry, a non-solicitation agreement allows an ex-employee to compete, but not to solicit their former employer’s customers in doing so. Louisiana businesses need to seriously consider protecting their business by using non-solicitation of customers agreements with their employees to avoid the FTC’s nationwide ban.

What Louisiana Businesses Should Do in Preparation for the FTC's Nationwide Ban On Non-Compete Agreements

The Federal Trade Commission (“FTC”) issued its final rule on April 23, 2024, banning all future non-compete agreements between employers and workers. The rule also bans all existing non-compete agreements between employers and workers, except those existing agreements with senior executives, earning greater than $151,164 annually, in policy-making positions. These senior executives with existing agreements are excluded from the ban. Future agreements with such senior executives, however, are included in the ban.

“Worker” is broadly defined as an employee, independent contractor, extern, intern, volunteer, apprentice, a sole proprietor, whether paid or unpaid, who provides a service to a person.

For existing non-compete agreements that are subject to the ban, the rule requires notice be given to each worker no later than September 4, 2024, the effective date of the final rule. The notice requires the person who entered into the non-compete agreement with the worker to provide clear and conspicuous notice that the worker’s non-compete clause will not be and cannot legally be enforced. The FTC rule requires that the notice be provided by hand delivery to the worker, or by mail at the worker’s last known personal street address, or by email to an email address belonging to the worker, or by text message to a mobile telephone number belonging to the worker. Employers must be diligent in providing the notice requirements in the form required to workers with existing non-compete agreements prior to September 4, 2024.

While the ban is being challenged in court and may never take effect, what should a Louisiana business do if the rule becomes effective on September 4, 2024? La. R.S. 23:921, the single statute in Louisiana controlling the validity of non-compete agreements, allows an employer to enter into both, or either, a non-compete agreement or non-solicitation of customers agreement. While the FTC’s nationwide ban on non-compete agreements prohibits future non-compete agreements in Louisiana, it does not appear to prohibit non-solicitation agreements between employers and employees. While a non-compete agreement prohibits an ex-employee from competing in the industry, a non-solicitation agreement allows an ex-employee to compete, but not to solicit their former employer’s customers in doing so. Louisiana businesses need to seriously consider protecting their business by using non-solicitation of customers agreements with their employees to avoid the FTC’s nationwide ban.

What Louisiana Businesses Should Do in Preparation for the FTC's Nationwide Ban On Non-Compete Agreements

The Federal Trade Commission (“FTC”) issued its final rule on April 23, 2024, banning all future non-compete agreements between employers and workers. The rule also bans all existing non-compete agreements between employers and workers, except those existing agreements with senior executives, earning greater than $151,164 annually, in policy-making positions. These senior executives with existing agreements are excluded from the ban. Future agreements with such senior executives, however, are included in the ban.

“Worker” is broadly defined as an employee, independent contractor, extern, intern, volunteer, apprentice, a sole proprietor, whether paid or unpaid, who provides a service to a person.

For existing non-compete agreements that are subject to the ban, the rule requires notice be given to each worker no later than September 4, 2024, the effective date of the final rule. The notice requires the person who entered into the non-compete agreement with the worker to provide clear and conspicuous notice that the worker’s non-compete clause will not be and cannot legally be enforced. The FTC rule requires that the notice be provided by hand delivery to the worker, or by mail at the worker’s last known personal street address, or by email to an email address belonging to the worker, or by text message to a mobile telephone number belonging to the worker. Employers must be diligent in providing the notice requirements in the form required to workers with existing non-compete agreements prior to September 4, 2024.

While the ban is being challenged in court and may never take effect, what should a Louisiana business do if the rule becomes effective on September 4, 2024? La. R.S. 23:921, the single statute in Louisiana controlling the validity of non-compete agreements, allows an employer to enter into both, or either, a non-compete agreement or non-solicitation of customers agreement. While the FTC’s nationwide ban on non-compete agreements prohibits future non-compete agreements in Louisiana, it does not appear to prohibit non-solicitation agreements between employers and employees. While a non-compete agreement prohibits an ex-employee from competing in the industry, a non-solicitation agreement allows an ex-employee to compete, but not to solicit their former employer’s customers in doing so. Louisiana businesses need to seriously consider protecting their business by using non-solicitation of customers agreements with their employees to avoid the FTC’s nationwide ban.