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FTC Drops Non-Compete Ban Fight, Shifts to Case-by-Case Enforcement

With rulemaking shelved, the agency is channeling its efforts into targeted Section 5 enforcement.

Overview

  • On September 5, the FTC moved to dismiss its appeals in Ryan, LLC v. FTC and Properties of the Villages v. FTC, accepting vacatur of the nationwide Non-Compete Rule.
  • Chair Andrew Ferguson sent September 10 warning letters to several large health care employers and staffing firms urging reviews of noncompetes and related restrictive covenants.
  • On September 4, the FTC filed a complaint against Gateway Services and proposed a consent order that would halt enforcement of noncompetes affecting roughly 1,800 employees.
  • The commission launched a public Request for Information on noncompete use across industries, with comments due by November 3, 2025.
  • With the federal ban abandoned, enforceability turns on divergent state laws, and Commissioner Meador highlighted factors the FTC will weigh, including wage level, scope and duration, less restrictive alternatives, and market power.