The Federal Trade Commission has voted to dismiss its appeal in two legal challenges to its 2024 rule banning noncompete agreements.
On Sept. 5, the agency dismissed appeals in Ryan, LLC v. FTC and Properties of the Villages v. FTC and acceded to the vacatur of the noncompete rule, which was struck down by a federal judge in Texas in August 2024. The rule would have invalidated millions of existing noncompete agreements and prevented employers from entering into or attempting to enforce and new noncompete agreements.
FTC Chair Andrew Ferguson and Commissioner Melissa Holyoak, who both dissented when the rule was first issued, said the agency had lacked the authority to issue the rule, noting it would have preempted state laws, voided more than 30 million contracts and redistributed “nearly a half trillion dollars of wealth within the general economy.”
While the FTC’s rule will not take effect, Mr. Ferguson said the commission under current leadership will continue to pursue enforcement actions against what it views as unlawful noncompete agreements through antitrust laws.
