As of March 17, 2025, the FTC's non-compete ban is not in effect, and the FTC has appealed, but currently is prohibited from enforcing it nationwide.
In April 2024, the FTC finalized a rule to ban most non-compete agreements, set to take effect in September. This rule has faced challenges in district courts, with rulings against the FTC in Florida and Texas. Appeals are ongoing in the 11th and 5th Circuits.
Andrew Ferguson, the new FTC chair appointed by President Trump, is a critic of the non-compete ban. Trump has also nominated Mark Meador to fill the fifth seat at the FTC, which would give Republicans a majority upon his confirmation. Ferguson argues that the ban is unlawful. The FTC opposes this intervention and may abandon the rule once Meador is confirmed.
While the FTC is facing these challenges, some states including Ohio, are moving to ban non-compete agreements themselves. The FTC points out that states like California, North Dakota, and Oklahoma manage without non-compete contracts.
If non-compete agreements are restricted or banned, businesses can protect their trade secrets and intellectual property through alternative mechanisms like:
- Non-disclosure agreements (NDAs)
- Non-solicitation agreements
- Confidentiality policies
- Data protection measures
- Intellectual property registration
- Employee training
- Clawback provisions
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
