FTC Shifts Strategy on Noncompete Agreements, Seeking Public Input After Ban is Blocked
(Updated September 11, 2025) – The Federal Trade commission (FTC) is recalibrating its approach to regulating noncompete agreements following a recent court decision that struck down its proposed nationwide ban. Instead of a broad prohibition, the agency is now focusing on a case-by-case enforcement strategy, seeking to identify adn challenge the most problematic agreements that stifle competition and harm workers.
This shift comes after a tumultuous period for the FTC’s efforts.In January 2023, the Biden administration issued an executive order directing the FTC to “ban or limit” noncompete agreements, citing concerns about their impact on wages and innovation.Last year, the FTC finalized a rule aiming to do just that, declaring noncompetes an unfair method of competition. However, that rule faced immediate legal challenges. In August 2024,a federal judge effectively blocked the ban from taking effect,siding with business groups like the American Hospital Association and the federation of American Hospitals who argued the FTC overstepped its authority.
On September 5th, 2025, the FTC officially dismissed its appeals in Ryan LLC versus FTC and Properties of the Villages versus FTC, accepting the court’s decision to vacate the rule. This signals a clear pivot towards a more targeted approach.
FTC Seeks Public Comments to Inform Future Enforcement
To inform this new strategy, the FTC has issued a RFI) inviting public comment on the scope, prevalence, and effects of employer noncompete agreements.
the FTC is specifically seeking input from:
Current and former employees bound by noncompete agreements.
Employers facing hiring difficulties due to competitor noncompetes.
* Industry experts with insights into the impact of these agreements.
Why the Focus on Noncompetes?
Noncompete agreements, which typically prevent employees from working for competitors or starting competing businesses after leaving a job, are a contentious issue. While employers often argue they are necessary to
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