The FTC's Noncompete Ban Is Gone. Here's What Replaced It.
The FTC dropped its nationwide noncompete ban and moved to case-by-case enforcement. Here's what the state patchwork now requires, and what's merely the safer choice.
The federal noncompete ban is dead, and it has been for a while. What replaced it is not silence. It is fifty different answers to the same question, plus a regulator that switched from writing one big rule to filing one case at a time. None of that is abstract for a hiring manager: it shows up the moment you want to make an offer to someone who signed a noncompete at their last job, or the moment someone on your own team hands in notice and you wonder what, if anything, still binds them.
How the ban actually ended
The Federal Trade Commission voted last September to formally abandon its nationwide noncompete rule, agreeing to vacate it and drop every pending appeal. The agency made that removal official months later, when it published the action in the Federal Register and struck the rule from the federal code entirely. Neither step was a surprise. A federal court had already blocked the rule from taking effect, and the litigation had gone against the agency for more than a year before it gave up the fight. For most employers the practical effect is smaller than the headlines suggested: the rule never took effect anywhere, so nothing that was already enforceable under state law stopped being enforceable.
The FTC didn't go quiet, it went case by case
Losing the rule didn't end the FTC's interest in noncompetes, it just changed the method. Following a public workshop early this year, the agency said plainly that it would not try again with a single categorical ban. Instead it picked a test case: a pet cremation company whose standard agreement applied to nearly every employee regardless of role, and which the FTC said barred more than 1,780 workers from the entire industry nationwide for a year after they left. That is the shape of enforcement now: not a rule everyone must follow, but a handful of egregious agreements made an example of. The industries flagged for extra scrutiny are no surprise — health care and staffing chief among them. The commission has also invited tips directly from workers who feel boxed in, and from employers who lose candidates to a rival's restrictive agreement, which suggests the next target is still being built from complaints rather than drawn up in advance.
The patchwork was always the real law
Even while the federal rule existed on paper, it never touched most of what actually governs a noncompete: state law. That is still true now that the rule is gone. A handful of states ban most noncompetes outright, including California, Minnesota, North Dakota, Oklahoma, Washington, and Wyoming, while most other states allow them with real restrictions. Some of those restrictions are new and specific. Colorado and Florida now only allow noncompetes against higher-earning employees, with Colorado drawing its line above six figures. A business operating in three states can have three different answers to whether the same agreement is enforceable, and none of those answers came from Washington. None of this is exotic — it is the same patchwork employment lawyers have navigated for years, getting more attention now only because a single federal rule briefly looked possible and then didn't happen.
What separates required from merely wise
The law requires you to know which of those states you actually operate in. Write the agreement to survive your weakest state, not your strongest one. That part is not optional. What is merely good practice, and increasingly the safer bet regardless of what the law technically allows, is reaching for a narrower tool first. Nondisclosure and nonsolicitation agreements protect most of what a noncompete protects. They don't sweepingly restrict where someone can work next, and they draw far less regulatory attention while doing it.
There is a hiring-side version of this problem that gets less attention than the firing-side one. Before extending an offer to a candidate bound by a noncompete at a competitor, find out what that agreement actually restricts, and in which state it would be tested. Inducing someone to break an enforceable agreement can expose the new employer, not only the employee who signed it.
Audit what you already have before you draft anything new. An agreement written for every employee regardless of role is exactly the pattern regulators are now hunting, one case at a time. The safest noncompete left standing is the one narrow enough that nobody bothers making an example of it.