The nationwide ban is dead — formally removed from federal regulations in February 2026. But "no rule" doesn't mean "no enforcement," and one 2026 case freed 18,000 workers anyway.
How We Got Here: The Rule, the Injunction, the Withdrawal
In April 2024, the FTC issued its Final Non-Compete Clause Rule (16 CFR Part 910), declaring virtually all post-employment non-compete agreements to be "unfair methods of competition" under Section 5 of the FTC Act — a rule that would have affected an estimated 30 million American workers, both prospectively and retroactively.
The rule never actually took effect. In Ryan LLC v. FTC (N.D. Tex., August 20, 2024), U.S. District Judge Ada Brown granted summary judgment setting aside and vacating the rule nationwide, just days before its scheduled effective date, holding that the FTC lacked the statutory authority to issue substantive "unfair methods of competition" rules of this kind.
What Changed Since the Original Ruling
The FTC initially appealed the Ryan decision to the Fifth Circuit. That changed with a shift in FTC leadership:
- September 5, 2025: under Chairman Andrew Ferguson, the Commission voted 3-1 to formally withdraw its appeals in both Ryan LLC v. FTC (5th Circuit) and Properties of the Villages v. FTC (11th Circuit), acceding to the vacatur. Commissioner Rebecca Slaughter dissented, noting that of roughly 26,000 public comments on the original rule, over 25,000 had supported a categorical ban.
- February 12, 2026: the FTC published a final action in the Federal Register formally removing the vacated Non-Compete Rule from the Code of Federal Regulations entirely — the rule isn't just unenforceable, it no longer exists in the regulatory text at all.
Current status, as of this writing: there is no federal rule banning non-compete agreements. Non-competes are governed entirely by state law, and a genuinely new nationwide ban would require either fresh FTC rulemaking under a different legal theory than the one courts already rejected, or an act of Congress.
What "No Rule" Doesn't Mean: Active Case-by-Case Enforcement
This is the part that gets missed in most coverage of the rule's demise: withdrawing the nationwide rule did not mean the FTC stopped caring about non-competes. The agency pivoted explicitly to case-by-case Section 5 enforcement against specific employers whose non-compete practices it considers coercive or overbroad — and it's brought real cases since:
- Gateway Services (September 2025)
- Adamas Amenity (February 2026)
- Rollins, Inc. (Orkin's parent company) — the FTC ordered Rollins to stop enforcing non-competes against more than 18,000 employees nationwide, with the final consent order approved June 22, 2026, and the agency separately warned 13 other pest-control firms of similar scrutiny.
The practical takeaway: even with no nationwide rule on the books, a sufficiently broad or coercive non-compete program can still draw direct FTC action against a specific employer. "There's no federal ban" is not the same as "the FTC doesn't care."
What This Means for You
Your non-compete's enforceability depends entirely on your state's law, not on any federal rule — several states (California, North Dakota, Oklahoma, Minnesota among others) ban most non-competes outright regardless of what's written in your contract, while many other states enforce them only if the terms are "reasonable" in scope. Check your specific state's current law before assuming either extreme.
Use our Non-Compete Clause Checklist and Non-Compete Legal Review Worksheet to organize the specifics of your own clause before deciding what to do about it.
Related Kibbo Tools
Sources
- Federal Trade Commission — Files to Accede to Vacatur of Non-Compete Clause Rule, official press release, September 5, 2025. ftc.gov
- Federal Register — Removal of the Non-Compete Rule to Conform These Rules to Federal Court Decisions, February 12, 2026. federalregister.gov
- FTC — Non-Compete Clause Rule page, tracking enforcement actions and litigation status. ftc.gov