The Federal Trade Commission voted 3-2 today to ban noncompete agreements between employers and employees. A full analysis of the final rule will be forthcoming, but key takeaways are:

• Final rule becomes effective 120 days after it is published in the Federal Register.
• All noncompete agreements between employers and “workers,” whether entered into before or after the effective date, will be invalid, unenforceable, and unlawful.
• Noncompete agreements with “Senior Executives” entered into before the effective date are not invalid, unenforceable, or unlawful. “Senior Executives” is defined as someone making more than $151,164 annually and who are in a “policy making position.”
• Does not appear to affect noncompete agreements in the sale of a business context.
• The final rule will almost certainly be challenged and its enforcement during the pendency of that challenge is uncertain.