The FTC Drops Ban on Noncompetes But Warns Healthcare Employers
The Federal Trade Commission (FTC) recently abandoned a prior rule that would have banned the use of most employee noncompete agreements in the United States. Many employers require employees to sign noncompete agreements, which typically limit employees from competing with their prior employers for defined periods of time. These agreements are sometimes challenged by the FTC or by private employees who claim that the agreements are overly broad.
In April 2024, the FTC voted for a rule that would have banned essentially all employee noncompete agreements. This rule would have been the first nationwide ban on noncompete agreements, which are generally governed by state laws. A federal judge in Texas blocked the FTC’s rule from coming into effect in August 2024. The FTC initially appealed the case, but on September 5, 2025, the FTC abandoned its appeal. The FTC also vacated its rule banning noncompete agreements.
When the FTC abandoned its appeal, it indicated the FTC would still investigate employment practices, including noncompete agreements, on a case-by-case basis. Several days later, on September 10, 2025, the FTC sent letters to several large employers in the healthcare industry, urging them to review their employment agreements, including noncompete agreements, to ensure they are reasonably tailored. The FTC claimed it had information suggesting that healthcare employers and staffing companies use noncompete agreements in employment contracts, and such agreements may be anticompetitive. The FTC noted that such agreements may limit employment options in rural areas where medical services may not be widely available. The letter also noted that narrow noncompete agreements can serve legitimate purposes but encouraged employers to review and discontinue overbroad agreements.
The FTC’s recent actions indicate that it intends to continue investigating and scrutinizing noncompete agreements, despite abandoning its prior broad non-compete ban. These actions underscore the importance for employers across all industries to understand the relevant rules around noncompete agreements.
This article is available in the Jenner & Block Japan Newsletter. / この記事はJenner & Blockニュースレターに掲載されています。
When the FTC abandoned its appeal, it indicated the FTC would still investigate employment practices, including noncompete agreements, on a case-by-case basis. Several days later, on September 10, 2025, the FTC sent letters to several large employers in the healthcare industry, urging them to review their employment agreements, including noncompete agreements, to ensure they are reasonably tailored. The FTC claimed it had information suggesting that healthcare employers and staffing companies use noncompete agreements in employment contracts, and such agreements may be anticompetitive. The FTC noted that such agreements may limit employment options in rural areas where medical services may not be widely available. The letter also noted that narrow noncompete agreements can serve legitimate purposes but encouraged employers to review and discontinue overbroad agreements.
The FTC’s recent actions indicate that it intends to continue investigating and scrutinizing noncompete agreements, despite abandoning its prior broad non-compete ban. These actions underscore the importance for employers across all industries to understand the relevant rules around noncompete agreements.
This article is available in the Jenner & Block Japan Newsletter. / この記事はJenner & Blockニュースレターに掲載されています。
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© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.
The Federal Trade Commission (FTC) recently abandoned a prior rule that would have banned the use of most employee noncompete agreements in the United States. Many employers require employees to sign noncompete agreements, which typically limit employees from competing with their prior employers for defined periods of time. These agreements are sometimes challenged by the FTC or by private employees who claim that the agreements are overly broad.
In April 2024, the FTC voted for a rule that would have banned essentially all employee noncompete agreements. This rule would have been the first nationwide ban on noncompete agreements, which are generally governed by state laws. A federal judge in Texas blocked the FTC’s rule from coming into effect in August 2024. The FTC initially appealed the case, but on September 5, 2025, the FTC abandoned its appeal. The FTC also vacated its rule banning noncompete agreements.
When the FTC abandoned its appeal, it indicated the FTC would still investigate employment practices, including noncompete agreements, on a case-by-case basis. Several days later, on September 10, 2025, the FTC sent letters to several large employers in the healthcare industry, urging them to review their employment agreements, including noncompete agreements, to ensure they are reasonably tailored. The FTC claimed it had information suggesting that healthcare employers and staffing companies use noncompete agreements in employment contracts, and such agreements may be anticompetitive. The FTC noted that such agreements may limit employment options in rural areas where medical services may not be widely available. The letter also noted that narrow noncompete agreements can serve legitimate purposes but encouraged employers to review and discontinue overbroad agreements.
The FTC’s recent actions indicate that it intends to continue investigating and scrutinizing noncompete agreements, despite abandoning its prior broad non-compete ban. These actions underscore the importance for employers across all industries to understand the relevant rules around noncompete agreements.
This article is available in the Jenner & Block Japan Newsletter. / この記事はJenner & Blockニュースレターに掲載されています。
When the FTC abandoned its appeal, it indicated the FTC would still investigate employment practices, including noncompete agreements, on a case-by-case basis. Several days later, on September 10, 2025, the FTC sent letters to several large employers in the healthcare industry, urging them to review their employment agreements, including noncompete agreements, to ensure they are reasonably tailored. The FTC claimed it had information suggesting that healthcare employers and staffing companies use noncompete agreements in employment contracts, and such agreements may be anticompetitive. The FTC noted that such agreements may limit employment options in rural areas where medical services may not be widely available. The letter also noted that narrow noncompete agreements can serve legitimate purposes but encouraged employers to review and discontinue overbroad agreements.
The FTC’s recent actions indicate that it intends to continue investigating and scrutinizing noncompete agreements, despite abandoning its prior broad non-compete ban. These actions underscore the importance for employers across all industries to understand the relevant rules around noncompete agreements.
This article is available in the Jenner & Block Japan Newsletter. / この記事はJenner & Blockニュースレターに掲載されています。
Related Lawyers
Related Articles
Related Capabilities
© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.
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