In late April, the Federal Trade Commission (FTC) finalized a ban on non-compete clauses in employment contracts. The new rule means that employers can no longer enforce non-compete clauses for nearly all workers, with some limited exceptions. The FTC’s reasoning behind the ban centers on promoting competition and worker mobility. The commission believes banning these kinds of agreements will stimulate the economy by allowing workers to freely pursue new opportunities and encourage the creation of new businesses. For the commercial real estate industry, the ban has been a source of anxiety since it was first proposed last year. But nearly 3 months after it was passed, it’s not eliciting much emotion at all.A rule to ban non-compete clauses in employment contracts was first proposed by the FTC in January of last year. In its announcement, the federal agency said the new rule would ban employers from pushing non-competes on their employees, something the agency called a “widespread and often exploitative practice” that prevents higher wages for workers, stymies innovation, and hampers entrepreneurs from starting up new businesses. The FTC, as well as elected officials supporting the ban, have argued that by getting rid of non-competes, worker earnings could be boosted by nearly $500 billion over the next decade and lead to the creation of more than 8,000 new businesses. The exceptions to the ban include entering into non-compete agreements when selling a business and existing agreements for senior executives who earn more than $151,000 annually. While the FTC approved the nationwide ban in April, it does not legally go into effect until 120 days after the rules are published in the Federal Register, which will be September 4th. Among the largest commercial real estate brokerages, the competition for talent has always been a cutthroat one. It’s not uncommon to see top commercial brokers—and sometimes teams—grab headlines for leaving one firm for another. In fact, historically, this has happened a lot, especially during times when the market is hot. But the constant turnover hasn’t impacted brokerages as much as it could, because firms like JLL and CBRE were able to use non-compete clauses. Including these in employment contracts meant that when a broker does change jobs, they would have to wait a certain time period—typically six months to one year—before entering into a contract with another employer, a practice often referred to as “garden leave.” If an employee doesn’t honor the non-compete, litigation could follow. For instance, in March, CBRE sued real estate executive Chris Hipps for allegedly breaching the non-compete clause in his contract by leaving the firm to join Cushman & Wakefield, a direct competitor. While the last year has seen a lot of speculation over the proposed rule, in the two months since the FTC approved the rule, it hasn’t seemed to make any waves in the real estate industry.“I think right now the brokers have so many issues that are so much more pressing than this that I don’t think it’s been discussed much,” said Alan Hammer, a veteran real estate attorney with the law firm Brach Eichler. Hammer, who is based in New Jersey, has seen enforceable non-compete clauses in employee contracts at real estate firms ever since he began practicing law 50 years ago. Before the FTC ban went into effect in May, the legality of non-compete agreements varied depending on the state. Some states, like California, Oklahoma, and Minnesota, had already fully banned non-competes, while in others that did recognize them, there were some restrictions, and it was often difficult to enforce the long-term agreements. Now, in a time when interest rates have remained high, and deal volume has plummeted, for the real estate industry, the new rule is not really making an impact, Hammer said. “For most brokers, this is last on their list,” he said. Critics of the ban, many of them leaders in the business community, say that barring noncompetes harms companies by making it harder for them to protect trade secrets. Others say the new rule could harm carefully cultivated customer relationships and increase the number of lawsuits and legal costs among competing businesses and their employees. There have been legal challenges filed against the new FTC rule, including one that came just hours after the FTC voted to approve the rule. The tax services firm Ryan was the first to file a lawsuit challenging the rule, citing in its complaint that some of its employees with non-compete clauses in their contracts have access to sensitive business information. Another challenge came from the U.S. Chamber of Commerce, the leader of which said that the decision “sets a dangerous precedent for government micromanagement of business.”It’s clear that the new FTC ban on non-compete agreements will have an impact on businesses and their employees, but at the moment, it’s not clear how much of that impact will be negative or positive and just how widespread it will be. It’s also important to remember that the new rule doesn’t go officially into effect until early September, at which point suspected violations of the rule can be reported to the Bureau of Competition. A number of lawsuits have been filed challenging the rule, and it will take some time to see the outcome of those challenges in court. In the commercial real estate world, brokers tend to jump between brokerages more when the market is doing well and deals are flowing. At the moment, that’s certainly not the case, but when the market does pick up, we may get a better idea of just how much the non-compete ban will come into play.