Non-Compete Clause Rule
The FTC's final rule bans nearly all non-compete clauses, with limited exceptions for existing agreements with senior executives and for sales of businesses. For auto dealers, this means non-compete agreements with employees (e.g., F&I managers, sales staff) are generally prohibited, impacting retention and competitive practices.
Aforeworn detected this change in the Auto Dealer F&I Compliance space on July 6, 2026 and published this briefing so affected operators are forewarned rather than caught off guard. It is rated High urgency. All auto dealers (franchise, independent, BHPH) and F&I managers should confirm how it applies to their specific situation before acting. There is a time constraint attached: Effective 120 days after publication in Federal Register (around September 4, 2024). Compliance required by that date.. Acting after that point can mean penalties, a lapsed licence, or lost eligibility — exactly the kind of surprise Aforeworn exists to prevent. Aforeworn monitors Auto Dealer F&I Compliance continuously and turns every detected change into a plain-English briefing like this one, so you always know first. Forewarned is forearmed.
What changed
Non-compete clauses are now an unfair method of competition; existing non-competes (except for senior executives) are unenforceable; new non-competes are banned.
Who it affects
All auto dealers (franchise, independent, BHPH) and F&I managers
What you must do
Review and revise employment agreements to remove non-compete clauses; notify affected employees that existing non-competes are void.
Deadline
Effective 120 days after publication in Federal Register (around September 4, 2024). Compliance required by that date.
Source: https://www.federalregister.gov/documents/2024/05/07/2024-09171/non-compete-clause-rule
Never miss a change like this again
Aforeworn watches Auto Dealer F&I Compliance around the clock and alerts you the moment a rule moves — with a plain-English brief on what to do.
Start your free trialRelated changes in Auto Dealer F&I Compliance
- Regulations and policy | Consumer Financial Protection Bureau
- Automobiles | Federal Trade Commission
- Small Business Lending Under the Equal Credit Opportunity Act (Regulation B)
- Concept Release on Residential Mortgage-Backed Securities Disclosures and Enhancements to Asset-Backed Securities Registration
- Car Loan Interest Deduction