Washington, D.C. — The Federal Trade Commission has agreed to end its legal fight over its rule banning non-compete clauses, moving to dismiss appeals and accept a court ruling that struck the measure down.
The decision came after two federal appeals—Ryan, LLC v. FTC in the Fifth Circuit and Properties of the Villages v. FTC in the Eleventh Circuit—challenged the agency’s authority to issue the rule. A district court had already found the FTC lacked the statutory power to enforce the ban.
On Thursday, the Commission voted 3–1 to dismiss the appeals and accede to the vacatur. Chairman Andrew N. Ferguson and Commissioner Melissa Holyoak, who had dissented from the rule when it was issued, released a joint statement supporting the move. Commissioner Mark R. Meador issued a concurring statement, while Commissioner Rebecca Slaughter dissented.
The non-compete rule, unveiled during the Biden administration, aimed to curb the use of employment contracts that prevent workers from moving to rival firms. Business groups and employers had challenged the rule, arguing that it exceeded the FTC’s legal authority.
The FTC emphasized that it continues to pursue its broader mission of promoting competition and protecting consumers through other enforcement tools.
