FTC drops noncompete ban, warns it will still investigate individual cases

On September 5, 2025, the Federal Trade Commission (FTC) voluntarily dismissed its appeals in two cases—Ryan LLC v. FTC in the U.S. 5th Circuit Court of Appeals and Properties of the Villages v. FTC in the 11th Circuit—ending the Biden FTC bid to regulate noncompete agreements. In April 2024, the FTC voted for a rule to ban most employee noncompete agreements, but a federal district court in Texas blocked the rule from becoming effective in August 2024.

Despite the FTC’s abandonment of the Biden rule, the agency has made it clear it will continue to investigate employment practices including noncompetes on a case-by-case basis. The agency has sent letters to several large employers in the health care and staffing industries, urging them to review their employment agreements, including noncompete agreements, to ensure they are reasonably tailored. It also announced on September 4 a public inquiry into noncompete practices “to better understand the scope, prevalence, and effects of employment noncompete agreements, as well as to gather information to inform possible future enforcement actions.”

It’s clear that the FTC will continue to investigate noncompete agreements, so employers should ensure their agreements comply with the latest legal requirements.