US Federal Trade Commission bans new noncompete agreements

Just to be a little pedantic, this is a rule, not a law. Basically Congress passes legislation that tells a US agency to regulate something (in this case, unfair business practices, 15 U.S.C. 45 and 46(g)) and the agency promulgates rules interpreting that law.

But to address your question, the actual rule banning non-competes is here:

• https://www.ftc.gov/legal-library/browse/federal-register-notices/non-compete-clause-rulemaking

I think these are the relevant bits?

Proposed § 910.2(a) would not apply retroactively. An employer would not violate proposed § 910.2(a) where—prior to the compliance date—it entered into or attempted to enter into a non-compete clause with a worker; maintained with a worker a non-compete clause; or represented to a worker that the worker is subject to a non-compete clause. Instead, proposed § 910.2(a) would require employers to refrain from these practices starting on the compliance date.

and

2(b) Existing Non-Compete Clauses

Proposed § 910.2(b) would clarify employers' obligations, and impose additional requirements, related to non-compete clauses entered into by the employer prior to the compliance date (“existing non-compete clauses”).

2(b)(1) Rescission Requirement

Proposed § 910.2(b)(1) would state that, to comply with proposed § 910.2(a)—which states it is an unfair method of competition for an employer to maintain with a worker a non-compete clause—an employer that entered into a non-compete clause with a worker prior to the compliance date must rescind the non-compete clause no later than the compliance date. The reasons why the Commission is proposing this rescission requirement are described above in the section-by-section analysis for proposed § 910.2(a).

The requirements in § 910.2(b)(1)-(3) do not apply where a worker's obligation not to compete elapsed prior to the compliance date. This is because the requirements in § 910.2(b)(1)-(3) derive from § 910.2(a), which establishes it is an unfair method of competition to maintain with a worker a non-compete clause. An employer does not maintain with a worker a non-compete clause, in violation of the Rule, where the obligation not to compete elapsed prior to the compliance date. For example, if a worker left their job in 2019 and was subject to a two-year obligation not to compete, that obligation would have elapsed in 2021, and the employer would not violate the Rule by failing to rescind the non-compete clause.

So, if I understand these points correctly, all non-competes are invalid starting from 120 days after the publication of the rule, but if your non-compete obligation has already elapsed/will have elapsed before the rule comes into effect, you can't retroactively use this rule to invalidate your old non-compete.

The last place I left had me sign a non-compete against working for similar companies. But when I asked WTF it was about, they said, "It's not that we don't want you to work wherever you want; just don't divulge our software and processes." OK, so then why not an NDA? And that's not what the 1 paragraph non-compete was saying on its face. It was pretty clear about not working for competitors. I think it was like a 1-3yr non-compete, so it either expired a year or two ago or literally this month. Didn't really apply anyway, since I went back to a previous employer in a completely different industry, where I'm still at.

And I was only an IT Field Tech/Jr Sysadmin for a small MSP. I wasn't a director or executive. I wasn't making six figures; only like mid five figures. And they wouldn't've sued me or stopped me, anyway, even if I did eventually land at a competitor. But it still felt really weird to sign it.