On 23rd of April 2024, the U.S. Federal Trade Commission (FTC) decided to ban non-compete clauses in labor contracts on the grounds that they affect the right to free labor mobility, which negatively impacts on the country’s competition, innovation and economic growth.
As an alternative measure, the FTC proposes the adoption of robust confidentiality agreements to protect confidential company information in the event of any employee’s departure.
Although this decision has already been the subject of some lawsuits questioning the FTC’s powers, it will come into effect 120 days after its publication, at which time existing clauses will no longer be effective, with the exception of those signed by members of senior management.
In regard to labor matters in Colombia, clauses that impose on the employee a commitment not to work in a certain activity or to work for a competitor are understood as unwritten. In terms of free competition, the Colombian authority has established a series of guidelines to determine whether these clauses could be viable or not, so it will be necessary to analyze the effects of the agreement on the market in each case.
