There is no federal FTC noncompete ban in effect — the 2024 rule was blocked and the FTC dropped its Fifth Circuit appeal on September 5, 2025. Instead the FTC is enforcing case-by-case: on April 15, 2026 it ordered pest-control firm Rollins, Inc. to stop enforcing noncompetes against more than 18,000 employees. At the state level, Virginia's expanded ban on noncompetes for low-wage and healthcare workers (and workers fired without cause) took effect July 2026.
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FTC pivots to case-by-case noncompete enforcement; states pass their own bans
Why this matters for founders
If you're drafting employment or contractor agreements, don't rely on a blanket noncompete — enforceability now hinges on your state's law, and overbroad clauses can invite FTC scrutiny even without a federal rule. When you hire, check the specific state rules (Virginia, California, Minnesota, etc.) before including restrictive covenants, and lean on NDAs and non-solicitation clauses that hold up more reliably.
Source: Foley & Lardner
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