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The Federal Trade Commission once promised to end noncompete agreements for good. Then, court challenges halted its effectuation. Now, as of September 5, 2025, that promise is gone. The FTC formally abandoned its proposed ban on non-competes, leaving millions of workers back where they started: navigating a confusing patchwork of state laws and restrictive contracts.
At Gardner Employment Law, we help physicians, executives, and other professionals dealing with noncompetes and similar restrictive covenants. Continue reading to learn what the FTC’s decision means for you.
What Are Non-competes and Why Do They Matter?
Non-compete agreements prevent employees from working for other companies for a period of time after either a termination, resignation, or lay-off. Employers argue that non-competes protect trade secrets and investments in training. Employees say they suppress wages, stifle innovation, and trap workers in jobs.
In our years of experience in non-compete litigation, we have foud that non-compets can:
- Limit mobility: Preventing a jump to a competitor even when better opportunities exist.
- Reduce leverage: Weakening bargaining power in contract negotiations.
- Delay new ventures: Stalling entrepreneurial ambitions.
But executives may also negotiate better severance packages or compensation trade-offs in exchange for agreeing to these restrictions.
Here’s a quick comparison of the pros and cons:
| Impact on Executives | Example |
| Negative: Restricted career mobility | A hospital CEO can’t take a position at a competitor within 50 miles for two years. |
| Negative: Pay suppression | An executive can’t leverage an offer from a rival firm to negotiate higher pay. |
| Positive: Negotiating leverage at signing | An executive secures a signing bonus in a contract containing a two-year non-compete. |
| Positive: Severance bargaining | Employers may pay more compensation to ensure that the executive honors the non-compete. |
How Does the FTC’s 2025 Decision Change Enforcement of Non-Competes?
We are back to square one, no federal involvement in a patchwork of different states’ laws. In April 2024, the FTC unveiled a sweeping nationwide ban on noncompetes. The FTC reasonsed that the ban would raise wages, generate new businesses, and boost innovation. But after litigation and the November 2024 election that brought in new leaders, the Trump-appointed FTC leadership pulled the rule banning non-competes in September 2025.
The FTC’s withdrawal means:
- No federal ban: The FTC will not enforce a nationwide prohibition on noncompetes.
- Return to state law: Regulation of noncompetes defaults back to the states.
- Ongoing scrutiny: Antitrust agencies and state attorneys general may still challenge abusive practices, but there is no blanket protection for workers.
Here’s how that shift appears in practice:
| Before FTC Abandonment | After FTC Abandonment |
| Workers expected nationwide freedom from noncompetes. | Workers remain subject to various different state laws governing non-competes. |
| Executives could rely on FTC backing in negotiations. | Executives must rely on their own private suits or state protections. |
| Employers faced federal-level risk for overbroad restrictions. | Employers feel more secure imposing non-competes. |
What Does This Mean for Executives Going Forward?
Without the FTC ban on non-competes, executives must protect themselves individually and rely on state-by-state enforcement.
- Less freedom of movement: In states where noncompetes are still legal, executives may be locked out of their own industry after departure.
- Costlier challenges: Fighting an overbroad non-compete is very expensive and time-consuming.
- Unequal playing field: Employers, especially large corporations, hold more leverage when executives have limited exit options.
At the same time, savvy executives can still use non-competes strategically:
- Negotiating higher pay, bonuses, or severance in exchange for accepting onerous restrictions at the start.
- Narrowing contract language so that the non-compete applies only to a specific role, market, or time period.
- Leveraging state laws that limit or ban non-competes in certain industries or require reasonable restrictions.
Bottom Line
The FTC’s abandonment of the non-compete ban leaves employees, including top executives, without the sweeping federal protections many had hoped for. The result: fewer guarantees, higher risks, and more reliance on careful negotiation.
At Gardner Employment Law, we help professionals navigate these challenges – from reviewing contracts to pushing back on unfair restrictions and protecting your long-term career goals. We are here to help you keep your options open.