FTC Officially Abandons Proposed Ban on Noncompete Agreements

Recently, the Federal Trade Commission (FTC) dismissed its appeals in two legal challenges to the FTC’s 2024 rule banning noncompete agreements in employment contracts across the U.S.  The noncompete rule never took effect. In April 2024, the FTC voted to adopt a sweeping rule that would have banned nearly all employee noncompete agreements, marking the first attempt to impose a federal prohibition of this kind. However, in August 2024, a federal judge in Texas blocked the rule from taking effect. Although the FTC initially appealed the decision, it later chose to abandon the appeal and formally vacated the rule on September 5, 2025. In other words, the FTC agreed to let the the court’s decision striking down the FTC 2o24 rule banning noncompetes stand.

With this, the FTC has now officially withdrawn its proposed rule that would have prohibited the use of most employee noncompete agreements . While this development ends the FTC’s effort to impose a nationwide ban, employers should still be mindful of the challenges with enforcing noncompetes.  Noncompete agreements, contracts that restrict employees from working for competitors or starting competing businesses for a defined period after leaving an employe, remain common in many industries in Florida and beyond. These agreements have long been the subject of legal challenges on the basis that such restrictions are vague or overly broad restrictions can unfairly limit an employee’s ability to earn a living.

Despite this recent decision to abandon the ban, the FTC made clear that it will continue to scrutinize noncompete agreements under its existing authority. The FTC’s recent actions demonstrate that, although the agency’s proposed blanket ban will not take effect, the FTC’s focus on employment-related restrictions remains a concern. Therefore, employers should continue to review their noncompete  agreements to ensure compliance with applicable law and legal opinions.

If you have, or intend to implement, non-compete agreements for your business, the AV-rated attorneys at Chane Socarras, PLLC regularly handle business and employment law matters and litigation, including those involving employment agreements, non-completes, non-solicitation agreements, confidentiality and non-disclosure agreements, trade secrets, and other labor and employment law matters. For more information, click here to contact the business litigation firm of Chane Socarras, PLLC or call us at (561) 309-3190.