In early September, the Federal Trade Commission (FTC) filed motions with two separate appeals courts voluntarily dismissing its defense of the Biden-era regulation that banned noncompete agreements. This is not terribly surprising, as current FTC Chairman Andrew Ferguson dissented from the initial promulgation of the rule, writing, “We do not have the power to issue the Final Rule … the Federal Trade Commission Act does not authorize the Commission to make substantive rules regulating private conduct.”
In April 2024, the FTC adopted a rule to ban almost all non-compete agreements nationwide. The rule faced multiple court challenges, with a federal court in Texas ruling it unlawful in August 2024. The FTC initially appealed the ruling but, in September 2025, chose to dismiss its appeal, effectively conceding the non-compete ban rule would not be implemented. Despite abandoning the broad ban, the FTC maintains that non-compete agreements can be unfair methods of competition under Section 5 of the FTC Act.