The “New” FTC Drops 5th Cir. Appeal, Instead: FTC Issues Public Request for Information on Noncompete Agreements

Noncompetes, the forbidden fruit? May employers enjoy a bite of the non-compete apple without being banished from the orchard? For now, historical form non-competes will not be subject to federal FTC review.

Last year, the FTC advanced a Rule on noncompete agreements to the final stages. The Rule deemed the use of noncompete clauses in most employment contracts an unfair method of competition and thus made them unenforceable.

The proposed Rule would have prohibited employers from: (1) entering or attempting to enter into a noncompete with a worker; (2) maintaining a noncompete with a worker; or (3) representing to a worker, under certain circumstances, that the worker is subject to a noncompete.

The FTC defined a noncompete agreement as “a contractual term between an employer and a worker that typically blocks the worker from working for a competing employer or starting a competing business after the end of the worker’s employment.” The Rule would have also required employers to rescind existing noncompetes, actively inform workers that they are no longer in effect and would have preempted state laws with less restrictive noncompete requirements.

In August 2024, a Texas federal court overruled the FTC’s ban on employers’ noncompete agreements, stating the agency overstepped its statutory authority in the rule. The “old” FTC appealed the ruling to the Fifth Circuit; however, on September 5, 2025, the Commission abandoned its appeal, instead asking to hold the appeal in abeyance while the Commission decides if it still wants to defend the rule. The Commission announced its plans to bring enforcement actions on “a case-by-case basis.”

Recently, the FTC launched a public inquiry to better understand the use and impact of employer noncompete agreements. The information gathered will help inform potential future enforcement actions. The public will have until November 3, 2025 to submit comments at Regulations.gov (Docket FTC-2025-0463-0001). Confidential submissions may be submitted by email to noncompete@ftc.gov. A complete list of the questions for which the FTC is seeking comments is available here (PDF).

Please remember that many states have many different non-compete laws that often contradict each other.

Worried about taking that non-compete bite? We are here to help!

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