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Last year, a federal judge in Texas entered a nationwide injunction halting the FTC’s rule banning most non-compete agreements. Now, the U.S. Supreme Court has just issued an opinion holding that federal courts have no authority to enjoin the conduct of persons who are not parties to the suit. What does that mean for your non-compete?
In this article, we clarify whether the federal district court’s injunction blocking the FTC rule is still enforceable and how this litigation affects you. If you’re bound by a non-compete or negotiating a contract, we explain below.
A Federal Court Blocked The FTC’s Non-Compete Ban
To understand the point of this article, we should provide some background. In August 2025, a federal judge in the Northern District of Texas issued an injunction in Ryan LLC v. FTC, placing a nationwide block on enforcement of the FTC’s Final Rule against non-competes. The FTC’s rule would have banned nearly all non-competes in this country, except for upper level executives. We explained the district court’s decision in Is the FTC’s Ban on Non-Competes Going to Stay?
So, what is the status of the FTC’s ban on non-competes? Because the FTC did not appeal the lower court’s nationwide injunction, non-compete agreements remain enforceable under Texas law. We returned to the status before the FTC promulgated its non-compete ban. Texans with a non-compete, including physicians and executives, must follow Texas law to determine whether the non-compete is valid.
A Possible Game-Changer: Trump v. CASA, Inc.
In June 2025, the U.S. Supreme Court addressed nationwide injunctions in Trump v. CASA, Inc. In that case, the Court sharply curtailed the use of nationwide injunctions, holding that federal districts courts generally cannot enter nationwide injunctions. In other words, the lower federal courts cannot block enforcement of federal rules beyond the parties in the lawsuit pending before them.
This about-face in precedent raises a serious question: Does the prior injunction issued in Ryan v. FTC apply nationwide? Most legal scholars now would say no.
Is the FTC Non-Compete Ban Still Blocked Nationwide?
Yes. Although Trump v. CASA suggests that the FTC’s rule against non-competes should be blocked only for the parties in Ryan, the answer is procedural The FTC would need to return to court with a motion asking the federal district court to modify its injunction so that it applies only to the plaintiffs. This would be consistent with the clarified law in Trump v. CASA. However, given the current political climate and changes in leadership at the FTC, such a motion seems unlikely.
The current FTC leadership, appointed under the Trump Administration, appears disinclined to revive the controversy over the non-compete ban. The Ryan ruling, which favors business interests, may remain untouched and effectively block enforcement nationwide, at least until the FTC moves to modify the court’s prior ruling. In other words, while the legal effect of the Ryan injunction should be limited, the practical result is that the FTC’s non-compete ban remains on hold across the country.
The Bottom Line: Watch, But Act Now
The FTC’s non-compete ban is not in effect. Whether it ever goes into effect depends on whether FTC takes action to apply the new CASA precedent.
Still, this is a moment of opportunity. With legal uncertainty in the air, some employers may be open to renegotiating restrictive clauses. Don’t wait for people in Washington D.C. to act. Take control of your contract now.