FTC Takes Steps to Abandon Non-Compete Rule
On September 5, 2025, the Federal Trade Commission (“FTC”) took steps to abandon its nationwide non-compete ban. As a reminder, the non-compete ban was published by the FTC as a final rule on May 7, 2024. Implementation of the ban has been delayed by various legal challenges since 2024. Now, the FTC has taken steps to abandon the litigation related to the would-be rule.
Specifically, the FTC has chosen to dismiss its appeals in the United States 5th Circuit Court of Appeals and the United States 11th Circuit Court of Appeals. The FTC voted 3-1 to dismiss the appeals. In doing so, the FTC echoed the district court decisions that raised concerns over the FTC’s authority to implement the non-compete ban. The vote occurred along political party lines. The FTC has issued a statement, which can be found here: https://bit.ly/4nqK4Fn
What does this mean for employers? The dismissal of the litigation signals that the FTC will not implement the nationwide non-compete ban. Note, however, that this does not mean that the FTC is abandoning scrutiny of all non-competes. The FTC has authority under Section 5 of the FTC Act to investigate unfair methods of competition, including non-compete agreements that are unjustified, overbroad, or otherwise unfair or anticompetitive. Therefore, the FTC will still likely target anticompetitive non-compete agreements such as agreements that serve no legitimate business purpose, agreements imposed on low-wage employees, or agreements that are used without regard for any individualized consideration of an employee’s role.
We will continue to monitor developments regarding the FTC’s enforcement of non-compete agreements. Businesses with specific questions about non-compete clauses should contact Nikole Canute, Scott Dwyer, Nate Wolf, Dominic Clolinger, or Kathryn Stegink as soon as practicable.
