FTC to walk away from noncompete ban and legal fight

Modern Healthcare – Monday, September 8, 2025
By Alex Kacik

The Federal Trade Commission plans to drop lawsuits that sought to preserve the agency’s ban on most noncompete agreements, as well as eliminate the regulation.

The FTC on Friday filed motions to dismiss its appeals of district court rulings that found the agency’s noncompete ban exceeded its regulatory authority. The agency also voted 3-1 to vacate the April 2024 rule.

Commissioner Rebecca Slaughter cast the dissenting vote. She said in statement that tossing the regulation and related legal cases is another attempt by President Donald Trump to “throw workers under the bus to ingratiate himself with corporations and their billionaire CEOs.”

Trump fired Slaughter and fellow Democratic Commissioner Alvaro Bedoya in March. The Supreme Court on Monday halted a lower court’s ruling that reinstated Slaughter to the FTC, allowing the case to continue.

The noncompete ban would’ve prevented employers from using the provisions to stop most workers from joining a rival organization. The lawsuits – Ryan LLC v. Federal Trade Commission and Properties of the Villages, Inc. v. Federal Trade Commission – led to a nationwide injunction before the regulation was implemented.

The FTC under Trump continues to distance itself from the Biden administration’s tenure. On Thursday, the commission issued a request for information about employers who unfairly wield noncompete agreements and described the noncompete ban as government overreach.

Eliminating the noncompete ban could prompt some states to bolster such agreements, hospital advisers said.

Even before the administration’s decision, Florida in July put in place a law allowing employers to issue four-year noncompete provisions. Previously, Florida employers had to show noncompetes had reasonable limitations on their length and geographic scope.

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