FTC Abandons Noncompete Rule

What happened: The Federal Trade Commission (FTC) Sept. 5 officially dropped its nationwide ban on noncompete agreements. The rule, finalized in April 2024, had been blocked in court. Instead of continuing its legal fight, the agency chose to back down and end the ban altogether.

Why it matters: The rule would have prohibited most noncompete agreements at for-profit companies, regardless of position or pay. These agreements are an important tool for many ARTBA members, helping firms protect confidential information, client relationships, and investments in employee training. They can also play a role in company valuations during mergers or acquisitions.

What's next: While the rule is off the books, the FTC has signaled it will pursue case-by-case enforcement against overly restrictive practices. Contact ARTBA's Prianka Sharma with questions.