{
  "type": "practice-guide",
  "canonical": "https://openagreements.org/practice-guides/non-compete/us/ftc-rule-status",
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  "data": {
    "topic": "non-compete",
    "state": "ftc-rule-status",
    "frontmatter": {
      "title": "The Federal FTC Non-Compete Rule: Where It Stands",
      "description": "There is no federal ban on non-compete agreements in effect. The FTC's 2024 Non-Compete Rule was set aside before it took effect and later removed from the Code of Federal Regulations, so non-competes remain governed by state law — though the FTC still challenges specific non-competes case by case under Section 5 of the FTC Act.",
      "state": "Federal (FTC)",
      "lastReviewed": "2026-07-22",
      "license": "CC BY 4.0",
      "authors": [
        "steven-obiajulu"
      ],
      "about": [
        "FTC Non-Compete Rule",
        "16 CFR part 910",
        "Ryan v. FTC",
        "Federal Trade Commission non-compete enforcement",
        "Federal non-compete law"
      ],
      "eyebrow": "Federal Update",
      "coverage": "U.S. federal"
    },
    "questions": [
      {
        "slug": "federal-ban-status",
        "label": "Is there a federal ban on non-competes?",
        "heading": "Is there a federal ban on non-competes in 2026?",
        "answerText": "No. There is no federal rule banning non-compete agreements in effect, so non-competes remain governed by state law. The Federal Trade Commission's 2024 Non-Compete Rule never took effect, and the Commission formally removed it from the Code of Federal Regulations in February 2026.",
        "sources": [
          {
            "id": "ftc-cfr-removal",
            "authorityType": "regulation",
            "tier": "primary-source-backed",
            "title": "Removal of the Non-Compete Rule (16 CFR part 910), 91 FR (Feb. 12, 2026)",
            "citation": "Revision of the Negative Option Rule; Withdrawal of the CARS Rule; Removal of the Non-Compete Rule, 91 Fed. Reg. (Feb. 12, 2026).",
            "url": "https://www.federalregister.gov/documents/2026/02/12/2026-02866/revision-of-the-negative-option-rule-withdrawal-of-the-cars-rule-removal-of-the-non-compete-rule-to",
            "proposition": "The FTC's February 12, 2026 Federal Register notice removed the vacated Non-Compete Rule (16 CFR part 910) from the Code of Federal Regulations, conforming the CFR to the Ryan v. FTC vacatur.",
            "verbatimQuote": "this final rule removes the Non-Compete Rule codified at 16 CFR part 910 from the Code of Federal Regulations",
            "date": "2026-02-12",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/ftc-rule-status#src-ftc-cfr-removal"
          }
        ]
      },
      {
        "slug": "what-the-2024-rule-did",
        "label": "What would the 2024 rule have done?",
        "heading": "What would the FTC's 2024 Non-Compete Rule have done?",
        "answerText": "It would have banned most employee non-competes nationwide, declaring it an unfair method of competition under Section 5 of the FTC Act to enter into, enforce, or represent that a worker is bound by a non-compete, with a September 4, 2024 effective date.",
        "sources": [
          {
            "id": "ftc-2024-rule",
            "authorityType": "regulation",
            "tier": "primary-source-backed",
            "title": "Non-Compete Clause Rule, 89 FR 38342 (May 7, 2024)",
            "citation": "Non-Compete Clause Rule, 89 Fed. Reg. 38342 (May 7, 2024) (16 C.F.R. pt. 910).",
            "url": "https://www.federalregister.gov/documents/2024/05/07/2024-09171/non-compete-clause-rule",
            "proposition": "The FTC's 2024 Non-Compete Rule declared it an unfair method of competition under Section 5 of the FTC Act for a person to enter into, enforce, or represent a worker as subject to a non-compete clause.",
            "verbatimQuote": "it is an unfair method of competition for a person to enter into or attempt to enter into a non-compete clause; to enforce or attempt to enforce a non-compete clause; or to represent that the worker is subject to a non-compete clause.",
            "date": "2024-05-07",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/ftc-rule-status#src-ftc-2024-rule"
          }
        ]
      },
      {
        "slug": "why-rule-vacated",
        "label": "Why did the rule never take effect?",
        "heading": "Why did the rule never take effect?",
        "answerText": "A federal court vacated it. In Ryan, LLC v. FTC, the U.S. District Court for the Northern District of Texas held that the FTC lacked statutory authority to issue the rule and that the rule was arbitrary and capricious, and it set the rule aside nationwide so that it would not take effect on September 4, 2024.",
        "sources": [
          {
            "id": "ryan-unlawful",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Ryan LLC v. Federal Trade Commission",
            "citation": "Ryan LLC v. Fed. Trade Comm'n, 746 F. Supp. 3d 369 (N.D. Tex. 2024).",
            "url": "https://www.courtlistener.com/opinion/10205745/ryan-llc-v-federal-trade-commission/",
            "deepLink": "https://www.courtlistener.com/opinion/10205745/ryan-llc-v-federal-trade-commission/#:~:text=In%20sum%2C%20the%20Court%20concludes%20that,Rule%20is%20arbitrary%20and%20capricious.",
            "proposition": "Ryan held the FTC lacked statutory authority to promulgate the Non-Compete Rule and that the rule was arbitrary and capricious.",
            "verbatimQuote": "In sum, the Court concludes that the FTC lacks statutory authority to promulgate the Non- Compete Rule, and that the Rule is arbitrary and capricious.",
            "date": "2024-08-20",
            "pullQuoteLocator": "In sum, the Court concludes that|Rule is arbitrary and capricious.",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/ftc-rule-status#src-ryan-unlawful"
          },
          {
            "id": "ryan-set-aside",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Ryan LLC v. Federal Trade Commission",
            "citation": "Ryan LLC v. Fed. Trade Comm'n, 746 F. Supp. 3d 369 (N.D. Tex. 2024).",
            "url": "https://www.courtlistener.com/opinion/10205745/ryan-llc-v-federal-trade-commission/",
            "deepLink": "https://www.courtlistener.com/opinion/10205745/ryan-llc-v-federal-trade-commission/#:~:text=The%20Non%2DCompete%20Rule%2C%2016%20C.F.R.,September%204%2C%202024%2C%20or%20thereafter.",
            "proposition": "Ryan set aside the FTC Non-Compete Rule nationwide and held it would not take effect.",
            "verbatimQuote": "The Non-Compete Rule, 16 C.F.R. § 910.1–.6, is hereby SET ASIDE and shall not be enforced or otherwise take effect on September 4, 2024, or thereafter.",
            "date": "2024-08-20",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/ftc-rule-status#src-ryan-set-aside"
          }
        ]
      },
      {
        "slug": "ftc-appeal-status",
        "label": "Did the FTC appeal, or could the rule come back?",
        "heading": "Did the FTC appeal the ruling, or could the rule come back?",
        "answerText": "The FTC initially appealed, but in September 2025 the Commission voted 3-1 to drop its appeals and accede to the rule's vacatur. With the appeals dismissed and the rule removed from the CFR, the 2024 rule is not coming back absent a brand-new rulemaking or an act of Congress.",
        "sources": [
          {
            "id": "ftc-accede-vacatur",
            "authorityType": "agency-guidance",
            "tier": "official-source-backed",
            "title": "FTC, Federal Trade Commission Files to Accede to Vacatur of Non-Compete Clause Rule",
            "citation": "FTC, Federal Trade Commission Files to Accede to Vacatur of Non-Compete Clause Rule (Sept. 5, 2025).",
            "url": "https://www.ftc.gov/news-events/news/press-releases/2025/09/federal-trade-commission-files-accede-vacatur-non-compete-clause-rule",
            "proposition": "In September 2025 the FTC voted 3-1 to dismiss its appeals of the Non-Compete Rule's vacatur and to accede to that vacatur.",
            "verbatimQuote": "The Commission voted 3-1 to dismiss the appeal and accede to the vacatur.",
            "date": "2025-09-05",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/ftc-rule-status#src-ftc-accede-vacatur"
          }
        ]
      },
      {
        "slug": "ftc-section-5-enforcement",
        "label": "Can the FTC still challenge non-competes?",
        "heading": "Can the FTC still challenge non-competes without a rule?",
        "answerText": "Yes. The FTC has no non-compete rule, but it retains authority under Section 5 of the FTC Act to challenge specific non-compete practices case by case. In 2026, the FTC obtained a final order requiring Rollins Inc. — Orkin's parent and one of the largest pest-control companies in the United States — to stop enforcing non-competes against more than 18,000 workers.",
        "sources": [
          {
            "id": "ftc-section5-rollins",
            "authorityType": "agency-guidance",
            "tier": "official-source-backed",
            "title": "FTC, FTC Takes Action Against Noncompete Agreements, Securing Protections for Workers",
            "citation": "FTC, FTC Takes Action Against Noncompete Agreements, Securing Protections for Workers (Apr. 15, 2026).",
            "url": "https://www.ftc.gov/news-events/news/press-releases/2026/04/ftc-takes-action-against-noncompete-agreements-securing-protections-workers",
            "proposition": "With no nationwide rule in place, the FTC used its Section 5 authority to seek an order requiring Rollins Inc. to stop enforcing non-competes against more than 18,000 workers. On April 15, 2026, the FTC issued a complaint and accepted a proposed consent order for public comment; the agency also sent warning letters to 13 other pest-control employers. The release lead uses the shorthand that the FTC ordered Rollins, but the same release identifies the operative document as a proposed consent order.",
            "verbatimQuote": "The Federal Trade Commission today ordered Rollins, Inc.—one of the largest pest-control companies in the United States—to stop enforcing noncompete agreements against more than 18,000 employees nationwide.",
            "date": "2026-04-15",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/ftc-rule-status#src-ftc-section5-rollins"
          },
          {
            "id": "ftc-rollins-final-order",
            "authorityType": "agency-guidance",
            "tier": "official-source-backed",
            "title": "FTC, FTC Approves Final Consent Order in Pest-Control Noncompete Matter",
            "citation": "FTC, FTC Approves Final Consent Order in Pest-Control Noncompete Matter (June 22, 2026).",
            "url": "https://www.ftc.gov/news-events/news/press-releases/2026/06/ftc-approves-final-consent-order-pest-control-noncompete-matter",
            "proposition": "The FTC finalized the Rollins consent order on June 22, 2026, making the requirement that Rollins stop enforcing non-competes against more than 18,000 employees a final Commission order.",
            "verbatimQuote": "The Federal Trade Commission finalized a consent order that requires Rollins Inc.—one of the largest pest-control companies in the United States—to stop enforcing noncompete agreements against more than 18,000 employees nationwide.",
            "date": "2026-06-22",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/ftc-rule-status#src-ftc-rollins-final-order"
          }
        ]
      }
    ]
  }
}