The End of the Federal Non-Compete Ban: What It Means for Your Business

For years, business owners have been watching the Federal Trade Commission (FTC) try to ban non-compete agreements nationwide. That effort is now officially over. On September 5, 2025, the FTC dropped its appeals in two lawsuits that had already blocked the rule in court and agreed to let the rule be permanently thrown out.

FTC Chairman Andrew Ferguson explained why: the rule was “patently unlawful.” It would have canceled about 30 million contracts already in place, overridden state laws in 46 states, and shifted “nearly a half trillion dollars of wealth” in the economy. In his view, the rule never had a chance of surviving in court.

But that doesn’t mean non-competes are safe from scrutiny. The FTC has made it clear it will now go after businesses one by one if it believes their agreements are unfair, too broad, or harmful to workers.

In this article, you’ll learn what this shift means for your business, why state laws remain critical, and what steps you can take to protect your company and stay compliant. As a LIFTed Business Advisor and attorney, I’ll also share how I can help you ensure your business isn’t adversely affected. 

Let’s start with a summary of what’s developed from April 2024 to September 2025.

What Changed: From Ban to Case-by-Case Crackdown

The FTC’s April 2024 rule would have banned almost every non-compete agreement in the country. But before it took effect, courts in Texas and Florida blocked it, saying the FTC didn’t have the authority to pass such a sweeping rule. Rather than keep fighting, the FTC backed down on September 5th, 2025.

Instead of a blanket ban, the FTC is shifting to targeted enforcement. Here are some examples:

• The Gateway Services case. On September 4, 2025 the FTC sued a national pet cremation company for requiring nearly all 1,800 employees, including low-wage workers, to sign one-year, nationwide non-competes. The company is now under an order to stop enforcing those restrictions.
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• Public inquiry. The FTC launched a request for information asking workers, employers, and competitors to share examples of harmful non-competes. Healthcare was singled out as a priority industry.
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• Healthcare warning letters. On September 10, 2025, the FTC sent letters to large healthcare employers and staffing firms warning that their agreements might illegally limit doctors’ and nurses’ job options and reduce patient access to care, especially in rural areas.
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What this means is clear: the FTC no longer wants to regulate with a single rule. Instead, it wants to police specific companies and industries it views as overusing non-competes.

How I help: When you work with me, I will conduct a review of your contracts. Together, we’ll examine whether your contracts could be flagged, identify safer alternatives, and put documentation in place that shows your agreements serve a legitimate purpose - something regulators want to see.

State Laws Still Matter—But So Does the FTC

Even without a federal ban, non-competes aren’t automatically enforceable. Each state sets its own rules, and they vary a lot:

• Total bans. States like California, Minnesota, Oklahoma, and North Dakota prohibit non-competes altogether.

• Strict limits. Illinois and Washington enforce them only under certain conditions, such as minimum income levels, time limits, or “garden leave” pay for the employee.

• Traditional enforcement. States like Georgia and Texas still allow “reasonable” non-competes if they protect trade secrets, confidential information, or customer relationships.

Here’s where it gets tricky: a contract that’s valid in Texas could be completely void in California. And now, even if your state permits it, the FTC might still investigate if the agreement looks like it harms employees or competition.

How I help: I stay on top of both state-level laws and federal enforcement priorities so you don’t have to. I can show you whether your contracts line up with your state’s requirements, and whether they could raise red flags under the FTC’s new case-by-case scrutiny. This ensures your agreements are not only enforceable but defensible if challenged.

Smart Alternatives for Protecting Your Business

The good news is you don’t need to rely solely on non-competes to protect what matters most. There are other tools that are less risky and often just as effective, which I can help you create or refine:

• Confidentiality agreements. These stop employees from taking sensitive information, like customer lists or trade secrets, outside the company.

• Non-solicitation agreements. These prevent departing employees from trying to take your clients or your team with them.

• Intellectual property clauses. These ensure that anything created on the job belongs to your business, not the employee.

• Tailored contracts. Role-specific contracts are much safer than generic templates that try to cover every situation.

• Onboarding and exit processes. Teaching employees about their obligations upfront, and reminding them as they leave, can prevent many conflicts.

How I help: By using these tools, I’ll help you create targeted protections that serve your business without putting you at odds with regulators.

Why Ongoing Trusted Advisory Support Matters

The big lesson here is that the law is constantly shifting. State legislatures continue to tighten restrictions, and the FTC is now actively patrolling industries for abusive practices. Relying on old contracts, or worse, online templates, can expose your business to lawsuits, investigations, and reputational harm.

It’s not enough to set up agreements once and forget them. The businesses that thrive are the ones that treat their legal protections as a living system - reviewed regularly, updated with changes, and aligned with their overall growth strategy.

How I help: As a LIFTed Business Advisor I take a holistic approach, and create an ongoing relationship with you and your business. I don’t just look at your contracts. I’ll also review your insurance, financial systems, and tax strategies to make sure your whole foundation is strong. That way, if the FTC changes its focus again or your state tightens its laws, you’re not scrambling - you’re already prepared. With me as your trusted advisor, you don’t need to worry about staying on top of the laws affecting your business; I’ll take that load off your shoulders.

Your Next Step

The FTC may have abandoned its federal ban, but it is far from finished with non-competes. Now more than ever, you need contracts and systems designed to withstand both state-level rules and federal enforcement.

As a Personal Family Lawyer® and LIFTed Business Advisor, my process begins with a LIFT Business Breakthrough™ Session. In this session, we’ll review your legal, insurance, financial, and tax foundations to identify gaps that leave your business exposed to liability. Then I’ll create a strategy to ensure your business is prepared for scrutiny, resilient against challenges, and positioned for long-term success. Best of all, I’ll be there for your business over time so you’re not reacting to problems, but have already taken proactive measures to protect your life’s work.

Click here to schedule a complimentary 15-minute consultation to learn more and get started today:

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