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FTC Drops Noncompete Ban Appeals, Targets Case-by-Case Enforcement

The agency pivots to case-by-case enforcement under Section 5 following court rulings that voided its 2024 rule.

Overview

  • On Sept. 5, the FTC voluntarily dismissed its appeals in the Texas and Florida cases, effectively accepting vacatur of its 2024 noncompete rule and ending the prospect of a nationwide ban for now.
  • FTC Chair Andrew Ferguson sent warning letters on Sept. 10–11 to multiple large healthcare employers and staffing firms urging contract reviews for potentially unfair noncompetes, noting the letters do not imply wrongdoing.
  • A Sept. 4 complaint and proposed consent order against Gateway Services alleges one‑year, industry‑wide noncompetes for nearly all employees; the order would bar enforcement and require notices to about 1,800 affected workers.
  • Also on Sept. 4, the FTC launched a Request for Information on the scope and effects of employer noncompetes, with public comments accepted through Nov. 3, 2025.
  • With the rule shelved, state statutes and court decisions continue to control enforceability as the FTC warns that action against unreasonable noncompetes remains a top priority and urges employers to audit agreements.