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\ "Trump's FTC Abandons Biden-Era Noncompete Ban: What 30 Million Workers Need to Know")
\\Federal Trade Commission Chairman Andrew Ferguson testifies on Capitol Hill on May 15, 2025 in Washington, D.C. -\\Kevin Dietsch/Getty Images North America\\\
The Federal Trade Commission changed course on its nationwide noncompete rule on September 5, 2025, when the Commission voted 3-1 to dismiss its appeals in two lawsuits and accept the court-ordered vacatur of the Biden-era regulation. The action ended the FTC's effort to revive a rule that had already been blocked nationwide before it could take effect.
The distinction matters. The September 2025 vote was not the first event that stopped the rule, and the FTC did not simply make 30 million existing noncompetes enforceable overnight. A federal district court in Texas had already set aside the regulation on August 20, 2024, preventing its scheduled September 4, 2024 effective date. The FTC appealed that ruling before changing position under Chair Andrew Ferguson.
In February 2026, the agency completed the process by formally removing the Non-Compete Clause Rule from the Code of Federal Regulations. As of September 2026, there is no nationwide FTC regulation automatically invalidating most employment noncompetes.
What the FTC Actually Voted to Do
On Friday, September 5, 2025, the FTC voted 3-1 to dismiss its appeals in Ryan, LLC v. FTC and Properties of the Villages v. FTC and to accede to the vacatur of the rule. Republican Commissioners Andrew Ferguson, Melissa Holyoak and Mark Meador supported the decision; Commissioner Rebecca Kelly Slaughter dissented.
Ferguson and Holyoak had opposed the regulation when it was adopted, arguing that the FTC lacked statutory authority to issue such a sweeping competition rule. The Texas district court later reached that statutory conclusion and set the rule aside. It is therefore more precise to describe the dispute as primarily involving the FTC's statutory rulemaking authority rather than say Ferguson personally established that the regulation was unconstitutional.
The Fifth Circuit dismissed the FTC's appeal in the Texas case on September 8, 2025, and the Eleventh Circuit dismissed the Florida appeal shortly afterward. On February 12, 2026, the FTC removed 16 CFR Part 910 from the Code of Federal Regulations to conform its regulations to the court decisions.
What the Biden-Era Rule Would Have Done
The FTC's April 2024 final rule would have prohibited employers from entering into new noncompete agreements with nearly all workers, including senior executives.
For existing agreements, the rule distinguished between senior executives and other workers. Existing noncompetes involving most workers would have become unenforceable, while certain existing agreements involving senior executives could have remained in force.
The FTC estimated that about 30 million American workers — close to one in five workers at the time — were subject to noncompete clauses. Because the rule was set aside before its effective date, those provisions never became nationwide federal law.
The $300 Billion Wage Claim Needs Context
The original article described roughly $300 billion in annual worker wages as being at risk. That figure came from an earlier stage of the FTC's economic analysis rather than the final rule's estimate.
When the FTC proposed its rule in January 2023, the agency said eliminating noncompetes could increase wages by nearly $300 billion per year. By the time the final regulation was adopted in April 2024, the agency's estimate had changed substantially.
The final FTC analysis projected $400 billion to $488 billion in additional worker earnings over a decade, equivalent to an estimated average earnings increase of about $524 per worker per year. It also projected a 2.7% increase in the rate of new business formation, representing more than 8,500 additional businesses annually.
The original article linked the wage discussion to an economic analysis of noncompetes. The final FTC estimates are more appropriate when describing what the abandoned 2024 rule itself was expected to accomplish.
Those figures were forecasts based on economic research and modeling, not benefits that were actually realized. Because the rule never took effect nationwide, it is not possible to observe its predicted national wage and business-formation effects directly.
Why Noncompetes Remain a Worker and Competition Issue
Research reviewed by the FTC has associated noncompete restrictions with reduced job mobility and, in some studies, lower wages. The economic theory is straightforward: when employees have fewer opportunities to move between competing employers, businesses may face less pressure to raise compensation to retain or recruit workers.
Employers make a different argument. Companies may use restrictive covenants to protect trade secrets, confidential information, customer relationships and investments in specialized training. The legal question is often whether a particular restriction goes further than necessary to protect those interests.
Noncompetes can also overlap with nondisclosure, nonsolicitation and no-hire provisions, but those are legally distinct arrangements. Whether any particular clause is enforceable depends on its terms, the applicable state law and, in some circumstances, federal competition law.
The FTC Did Not Abandon Noncompete Enforcement Entirely
The end of the nationwide rule did not mean the FTC stopped challenging individual employment restrictions. Ferguson's agency shifted toward case-by-case enforcement under existing competition laws.
One day before the FTC voted to abandon its rule appeals, the agency brought a case against Gateway Services, a major pet-cremation company. The FTC alleged that Gateway imposed one-year nationwide noncompetes on nearly all employees. A final November 2025 order required the company to stop enforcing covered agreements, freeing nearly 1,800 employees from those restrictions.
The agency expanded that approach in 2026. In June, the FTC finalized an order requiring pest-control company Rollins to stop enforcing noncompetes against more than 18,000 employees nationwide. According to the FTC's complaint, the restrictions typically lasted two years and covered areas within roughly 75 miles of company locations.
Those cases show the practical difference between the two approaches. The abandoned 2024 rule would have created a broad nationwide standard; the current approach requires the FTC to challenge particular employers or practices individually.
Healthcare Has Received Particular FTC Scrutiny
Healthcare employers and staffing businesses were among the sectors receiving heightened attention after the nationwide rule was abandoned. On September 10, 2025, Ferguson sent warning letters to several large healthcare employers and staffing firms urging them to review employment agreements for potentially unreasonable noncompete restrictions.
Healthcare is economically significant because physician and other professional mobility can affect both labor-market competition and patients' access to providers. But noncompete use is not confined to healthcare or technology. Restrictions appear across industries and at different levels of seniority.
That makes broad claims about one industry being universally more affected than another difficult without defining the worker population and type of restrictive covenant being measured.
The policy shift fits into a wider debate about the reach of federal regulation, also discussed in News Fusion 365's earlier coverage as seen in Trump's broader regulatory approach.
State Law Is Now Especially Important
With no nationwide FTC ban in effect, state law remains central to whether an ordinary employment noncompete can be enforced. The result is a patchwork rather than one national rule.
California broadly treats employment noncompetes as void outside narrow statutory exceptions. North Dakota likewise generally voids contracts restraining a lawful profession, trade or business except for specified situations such as the sale or dissolution of a business.
Minnesota has provided since 2023 that covenants not to compete in covered employment agreements are void and unenforceable, with exceptions for certain business-sale and dissolution arrangements. Oklahoma takes a different approach: former employees generally may enter the same or a similar business, although the law permits restrictions on directly soliciting established customers of the former employer.
The original article cited California, North Dakota, and Oklahoma currently prohibit most noncompete agreements. That specific source could not be verified, and the underlying state rules are more nuanced than the wording suggests. Minnesota should also be included when describing states with especially broad restrictions.
Many additional states regulate noncompetes through salary thresholds, occupational restrictions, notice requirements, duration limits or reasonableness tests. Employers operating in multiple states therefore cannot safely assume that a clause enforceable in one jurisdiction will be enforceable in another.
The Court History Matters
The federal rule's legal problems began well before the September 2025 vote. President Biden's July 2021 competition executive order encouraged the FTC to consider addressing unfair noncompete practices. The FTC proposed a broad rule in January 2023 and finalized it in April 2024.
Business groups and employers challenged the final rule almost immediately. In August 2024, U.S. District Judge Ada Brown in Texas granted summary judgment against the FTC, set aside the rule and held that the agency lacked statutory authority for the regulation. The order prevented the rule from taking effect nationwide.
The FTC appealed in October 2024. After the presidential transition, the agency sought pauses in the litigation and then moved in September 2025 to dismiss both major appeals. The Fifth Circuit dismissed the Texas appeal on September 8 and the Eleventh Circuit dismissed the Florida appeal on September 10.
In February 2026, the Commission formally removed the regulation from the CFR. That sequence is more precise than describing the Trump administration as simply repealing a functioning Biden rule: the rule had already been judicially set aside before the administration changed.
What Case-by-Case Enforcement Means for Employers
The current federal environment gives employers more room than the abandoned nationwide rule would have allowed, but it does not make every noncompete lawful.
The FTC can still investigate restrictions it believes constitute unfair methods of competition. State attorneys general and private parties may also challenge agreements under applicable state statutes, contract law and antitrust principles.
For employers, that means a defensible restriction generally needs a clear business justification and must comply with the law of the relevant jurisdiction. Trade-secret protection, confidentiality provisions and narrowly tailored customer restrictions can sometimes provide alternatives to broad bans on working for competitors.
News Fusion 365 has covered related disputes over agency authority and federal regulation in similar to other regulatory challenges facing federal agencies.
What Workers Need to Know
The FTC's abandoned rule does not automatically determine whether an individual worker's noncompete is enforceable. The answer can depend on where the worker lives and works, when the agreement was signed, the worker's occupation and compensation, and the agreement's duration and geographic scope.
A contract may also contain separate confidentiality, trade-secret, nonsolicitation or repayment provisions that remain relevant even when a noncompete itself is void.
Workers should therefore distinguish between the status of the former FTC nationwide rule and the enforceability of their own agreement. The national rule is gone; state-specific restrictions and targeted federal enforcement remain.
International Comparisons Are More Nuanced
Other countries also regulate post-employment restrictions, but there is no single European model. Germany's Commercial Code provides that covered post-employment noncompetes generally require compensation equal to at least half of the employee's most recent contractual remuneration and cannot exceed two years.
France uses a different framework shaped largely by case law and collective agreements. A valid noncompete generally must protect a legitimate business interest, be limited by time and geography, target specified activities and provide financial compensation to the employee.
The original article linked international claims to Germany and France impose strict limitations on the duration and scope of such agreements. That specific URL could not be independently verified, although the broader statement that both countries impose significant conditions is supported by their legal frameworks.
The United Kingdom requires an additional correction. A previous British government announced in 2023 that it intended to introduce a three-month statutory cap, but the proposal was not enacted. In late 2025 and early 2026, the government reopened the issue and sought views on options including a time limit, a salary-threshold ban and broader restrictions. As of September 2026, it would therefore be inaccurate to say Britain already has a nationwide three-month maximum.
Later Context: The Federal Rule Is Gone, but Enforcement Continues
By September 2026, the policy landscape had settled into a hybrid model. The FTC's sweeping 2024 regulation had been removed from federal regulations, but the agency continued using individual enforcement actions against restrictions it alleged were anticompetitive.
Gateway and Rollins are the clearest examples. Together, the FTC's final orders covered nearly 20,000 workers. The agency also continued investigating labor-market restrictions and no-hire arrangements rather than treating the failure of the nationwide rule as an end to federal competition oversight.
For businesses, the practical challenge is therefore compliance across several layers of law rather than a simple federal yes-or-no rule. For workers, the key question is no longer whether the FTC's nationwide ban applies — it does not — but what state law and any applicable federal competition rules say about the specific agreement they signed.
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