A clear exterior shot of the FTC building in Washington, D.C. Image Credit: Wikimedia Commons
The Trump administration just dropped its defense of the FTC rule that would have banned noncompete agreements nationwide. That rule, passed under Biden, was supposed to stop companies from locking workers into jobs by preventing them from joining competitors or starting their own business. But now, with the government backing away, that sweeping ban is basically dead.
Noncompetes aren’t just for high-level executives, more than one in five U.S. workers (over 20%) have signed them. That includes low- and mid-wage employees who can’t take better opportunities because their boss has them legally tied down. These agreements are notorious for keeping wages low and trapping people in bad working conditions.
The FTC says it will still go after abusive cases one by one (they recently forced a company called Gateway Services to stop using noncompetes for certain employees). But instead of a nationwide fix, we’re left with a patchwork of state laws and selective enforcement. In some states, workers have protections. In others, you’re still stuck.
So in short, corporations keep their tool to hold onto workers, the blanket ban is gone, and U.S. workers are all left fighting this on a case-by-case basis.
Reference: Reuters. (2025, September 6). Trump administration drops defense of ban on employee ‘noncompete’ agreements. Reuters. https://www.reuters.com/legal/litigation/trump-administration-drops-defense-ban-employee-noncompete-agreements-2025-09-06/