FTC Drops Non-Compete Ban: What Employers and Employees Need to Know About Enforceability

On September 5, 2025, the Federal Trade Commission gave up on its federal non-compete ban. As a result, employees who are subject to non-competes can no longer expect a white night, in the form of the FTC, to free them from their handcuffs when seeking to jump jobs. Instead, non-competes will once again need to be evaluated on a case-by-case basis for enforceability by counsel prior to an employee considering their options and a new employer considering hiring while being subject to a tortious interference with a contract claim. Otherwise, questions like the non-compete's duration, scope of activities, and geographic restrictions will be before the courts. Judges will need to determine if an employee had specialized training or investment from the employer, whether the non-compete concerns a job function dealing with trade secrets and conditional information, and how goodwill was utilized in forming the customer relationship. Then, there is the issue of the enforceability of liquidated damages clauses (predetermined damages for breach) and whether the court will fully strike an overly broad non-compete or instead blue pencil it into a more modified non-compete. Either way, employers who cannot gamble as to what a judge will do and face deep-pocket competitors, who will happily battle out poaching a start employee, should consider garden leave where the employee remains on payroll for the period of the non-compete to avoid ever having to earn a living otherwise while preserving loyalty for as long as the employer seeks. 

Facing a Non-Compete Issue?
Whether you’re an employer seeking to enforce an agreement or an employee evaluating your options, Lieb at Law can help. Our attorneys are experienced in litigating restrictive covenants, negotiating employment agreements, and advising on strategies to protect your rights and business interests.

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Florida's CHOICE Act - Non-Competes and Garden Leave - Employers Celebrate

Effective July 1, 2025, Florida's CHOICE Act causes a four-year non-compete agreement to be presumptively enforceable.

Does that mean that all employers are changing their choice of law provisions to take advantage of Florida's non-compete rights?

Nope - the CHOICE Act requires an employer to have a principal place of business in a Florida County for the law's effectiveness. In fact, the law ties qualification to the CHOICE Act to an employee having an annual salary greater than twice the average wage of the Florida county where the employer's principal place of business is located. So, no dice.

However, is this a trend? Regardless, employees - you don't have to sign such non-competes and the law makes that clear by giving you a 7-day review period before its binding with notice of your right to have an attorney, in writing. 

No More Non-Competes VETOED

On December 22, 2023 Governor Hochul vetoed Bill A01278. This bill would have fundamentally altered New York State's Labor Law by prohibiting non-compete agreements and additional restrictive covenants in labor and employment contracts.

This bill would have addressed the usage of non-compete agreements in employment contracts. It defined critical terms and highlighted that employers, their representatives, or officers of corporations could not solicit, demand, or accept a non-compete agreement from a covered individual. However, it didn't prohibit employers from entering into agreements that protected trade secrets, client information, or client solicitation. 

The justification behind this legislation was grounded in the adverse impact of non-compete agreements on New York's labor market and economy. These agreements purportedly curtailed workers’ mobility, limiting their ability to explore better employment opportunities and potentially stifling competitive wages and benefits.

The federal government has shown interest in a nationwide ban on non-compete agreements. New York could have lead the charge in fostering a more open and competitive labor market by codifying this ban into state law. 

Now, non-competes live on and companies hiring those with non-competes should be worried about tortious interference with a contract claims being levied against them. 

To learn more about Bill A01278, click here.