A Practice Note providing an overview of the use of non-compete agreements and provisions (collectively referred to as non-competes) in the employment and M&A context. It also discusses the US federal income tax considerations relevant to non-competes. On April 23, 2024, the Federal Trade Commission (FTC) issued its final rule prohibiting entry into a non-compete with a worker (including an employee, independent contractor, or sole proprietor service provider) on or after the rule's effective date, other than in connection with a bona fide sale of a business entity. If the final rule becomes effective, any non-compete provision and any other restrictive covenant that is deemed to be a de facto non-compete clause will be unenforceable, to the extent prohibited by the final rule. The final rule is scheduled to become effective 120 days after its publication in the Federal Register, if not delayed or derailed by legal challenges. For more information on the final rule, see Legal Update, FTC Issues Rule Banning Non-Compete Clauses and Practice Note, Non-Compete Agreements with Employees.