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FTC Abandons Non-Compete Ban, Shifts to Targeted Enforcement

State law will now largely govern restrictive covenants as the agency pivots to case-by-case scrutiny and opens a public inquiry.

Overview

  • On Sept. 5, the FTC moved to dismiss appeals in Ryan, LLC v. FTC and Properties of the Villages v. FTC, with a 3–1 commission vote that included a dissent from Commissioner Rebecca Slaughter.
  • On Sept. 10, the agency sent warning letters to several large health care and staffing employers urging comprehensive reviews of non-compete and other post-employment restrictions.
  • The FTC launched a public inquiry on non-compete practices that is accepting submissions through Nov. 3, 2025, signaling continued oversight beyond any single rule.
  • Officials highlighted case-by-case enforcement using existing authority, citing concerns about worker mobility and access to care and referencing a proposed consent order against Gateway Services, Inc.
  • With the federal rule vacated, employers face a patchwork of state standards, as jurisdictions like California restrict enforcement while states such as Florida remain more receptive and places like Maryland, D.C., and Virginia impose targeted limits.