Federal Trade Commission in USA bans most non-compete agreements

A new rule issued by the Federal Trade Commission bans most non-compete agreements between employers and employees. This is meant to take effect on September 4, 2024. The rule has application to new and existing non-compete agreements. For more information, visit the FTC website here.

While this new rule may not affect Canadian employers, this is an indication of a trend in recent years.

In our blog post in 2022, we wrote about the Working for Workers Act that came into force in Ontario in December 2021. That legislation amended the Employment Standards Act in Ontario to prohibit most forms of non-compete clauses.

In our blog post in 2023, we wrote about the Canadian Competition Bureau prohibiting mutual non-poaching agreements.

The courts in BC are generally reluctant to enforce non-competition clauses, and the general trend is heading towards more freedom of movement for employees. However, we are not yet at a point where non-competition clauses are explicitly prohibited in BC.