United States: FTC Drops Employee Non-Compete Rule, and Announces Targeted Enforcement Action Challenging Non

In brief

The U.S. Federal Trade Commission (FTC) has withdrawn its notices of appeal in cases before the Fifth and Eleventh Circuits that involved challenges to its proposed rule to ban most employee non-compete agreements. That FTC rule, issued under former FTC Chair Lina Khan in April 2024, was struck down by federal district courts in Texas and Florida before ever taking effect. Withdrawing its appeals leaves those adverse district court decisions in force and returns U.S. antitrust scrutiny of employee non-compete agreements to the pre-existing case-by-case review. Notably, the day prior to publicizing its withdrawal decision the FTC announced a broad public inquiry on employee non-compete agreements. And, on the same day as its withdrawal decision, the FTC issued a complaint challeng