On September 5, 2025, the Federal Trade Commission (“FTC”) withdrew its appeals in the United States Courts of Appeal for the Fifth and Eleventh Circuits that had challenged decisions issued by federal district courts in Florida and Texas enjoining the FTC from enforcing a nationwide ban on noncompete agreements.

By way of background, the FTC banned noncompete agreements in April 2024. Before the ban took effect, however, federal district courts in Florida and Texas enjoined the FTC from enforcing the ban, with the Texas decision rendering it void nationwide.

Despite this recent move to withdraw the pending appeals, the FTC remains committed to scrutinizing noncompete agreements in an effort to enforce federal anti-trust laws. In fact, Chairman Andrew Ferguson announced that the FTC “will continue to enforce anti-trust laws aggressively against noncompete agreements.” To this end, on September 4, 2025, the FTC issued a public Request for Information to identify businesses that utilize anti-competitive noncompete agreements as potential targets for enforcement action, further signaling a return to aggressive case-by-case enforcement. And, on the same day, the FTC initiated an enforcement action against Gateway Services, a pet cremation services company, for imposing overly restrictive noncompete agreements on all 1,800 of its employees.

With the renewed message of federal enforcement comes a reminder also to consider the impact of various state laws when deciding whether or not and how best to utilize noncompete agreements. Many states limit the use of noncompete agreements to employees whose income exceeds defined thresholds and require compliance with strict notice requirements. For instance, in Maine and New Hampshire employers are prohibited from entering into noncompete agreements with employees who earn at or below a defined income threshold. And, for the employees who earn above that threshold, employers must comply with certain notice and disclosure requirements.

While the FTC has stepped back from a broad regulatory approach, the FTC’s renewed focus on case-by-case enforcement highlights the need for careful consideration of the scope and necessity of noncompete agreements. As a proactive measure, employers should review their agreements, assess risk and compliance with federal antitrust laws and various state statutes, and prepare for potential scrutiny from federal enforcers. For more information or assistance with noncompete agreements, please contact a Bennett Law Firm attorney.