The Federal Trade Commission under Biden finalized a rule banning most non-compete agreements, but a federal court in Texas set it aside in August 2024 in Ryan, LLC v. FTC before it took effect, and the FTC appealed. The FTC has estimated that some 30 million people, about 1 in 5 American workers, are bound by non-competes; former chair Lina Khan said the ban could raise wages by nearly $300 billion a year and lead to 8,500 new businesses annually, NPR reported.
On September 5, 2025, Trump's FTC voted 3-1 to dismiss its appeals “and to accede to the vacatur of the Non-Compete Clause Rule.” Chairman Andrew Ferguson, who had dissented from the rule on the ground that the FTC lacked authority to issue it, says protecting workers against non-competes remains a priority, NPR reported. On February 12, 2026, the commission removed the rule from the Code of Federal Regulations.
Correction (October 2, 2026): this entry was dated February 5, 2025 and said Trump's abandonment of the rule trapped 30 million workers and cost them $250 to $296 billion a year. The rule never took effect, having been blocked by a court in August 2024; the FTC dropped its appeal on September 5, 2025. The 30 million figure is the FTC's estimate of workers bound by non-competes, not workers the decision trapped. Several claims about lobbying and state comparisons were removed for lack of sourcing, and the severity was lowered to moderate.