ROCHESTER, N.Y. — In a final ruling from the Federal Trade Commission, noncompete contracts and clauses are being banned nationwide.

The Glennon Law Firm has been swamped with calls and emails since Tuesday’s news.

What You Need To Know

  • The FTC rules to ban noncompete clauses nationwide

  • The FTC says banning noncompetes will mean more innovation, more startups and higher earnings

  • Peter Glennon of the Glennon Law Firm says there will be efforts to block the ruling before its effective in four months

“Everybody’s wondering, does this mean my noncompete agreement is invalid? The answer is no. So sit tight. Don’t rush to a conclusion. Don’t believe that it’s just no longer going to be enforced," said Peter Glennon of the Glennon Law Firm.

He wrote a book about noncompete agreements in the health care industry.

“The purpose of a noncompete is when there’s a legitimate business interest, whether it’s special secret information, highly sensitive information or an investment in the employee made by the employer, it’s just a contract that the employee promises not to go work for a direct competitor," said Glennon.

The FTC says banning noncompetes will mean more innovation, more startups and higher earnings. And that 18% of U.S. workers are covered by noncompetes. That’s 30 million people. 

Glennon describes the most common industries noncompete contracts are used.

“Definitely in health care," he said. "You have a lot with high-end outside salespeople. You have them with high-end C-suite executives, senior vice presidents, but you can have them anywhere. Where I don’t see them is where a lot of politicians talk about, lower-level entry-level working-class jobs. We don’t see them there that often. And when you do, the legitimate ones, they’re in exchange for training.”

While the FTC states that the ban is designed to protect the fundamental freedom of workers to change jobs, Glennon believes it’s not that simple, “For some people this will be a great relief and they will feel comfortable going to work in the same industry doing the same or similar job, but for a competitor and most of the time it will be fine," he said. "But there will be some companies who sit back and are hesitant to invest in their employees as much as they may have been doing as much as they may have up to this point.”

And Glennon says there may be a ruling, but it’s not a done deal.

“We have four months before this FTC ruling is effective and there are lawsuits such as by the U.S. Chamber of Commerce that will seek to stop the implementation of this rule, and odds are favorable that a federal court will likely pause the effective day," he said. "So nobody should rush to any judgment.”