FTC rule bans noncompetes; Chamber of Commerce sues to halt

Tens of millions of noncompete clauses included in employee contracts nationwide will be null and void by about Labor Day under a final rule issued Tuesday by the Federal Trade Commission (FTC).

The rule to largely ban noncompete clauses in the United States is already under fire, after a lawsuit filed Wednesday by business advocates cast some doubt on its future.

Noncompete clauses are legal contracts employees are required to sign, in fields ranging from baking to computer technology, that prohibit them from working for another employer in the same field for a certain amount of time. An estimated 30 million employees are subject to noncompete clauses, the FTC said in a press release announcing the rule.