Trump’s FTC Abandons Biden-Era Ban On Noncompete Agreements

The Federal Trade Commission's lone Democrat said the GOP majority was “choosing the side of controlling bosses over American workers.”

The Federal Trade Commission has abandoned the historic prohibition on noncompete agreements it proposed just a year and a half ago, the result of President Donald Trump’s change in leadership at the antitrust regulator.

The agency said Friday that it was voluntarily dropping its appeals in court cases where employers had challenged the legality of the noncompete ban finalized under former President Joe Biden. While the rule had been temporarily blocked due to the litigation, the agency’s withdrawal of support means it is now effectively dead.

Noncompete clauses forbid workers from taking jobs at competing firms for a certain amount of time after leaving an employer. Critics say the agreements keep wages down and stifle innovation by locking workers into their jobs, preventing them from starting their own businesses or taking their talents to the highest bidder.

The ban on noncompetes was one of the hallmark progressive reforms of the Biden era, championed by former FTC chair Lina Khan, who said outlawing the agreements was about restoring workers’ liberty in the labor market. Khan stepped down as FTC chair upon Trump’s inauguration.

Trump named Andrew Ferguson, who’d opposed the noncompete ban, to be the commission’s new chair, and tried to fire two Democratic commissioners before their terms were up. One of those Democrats, Alvaro Bedoya, resigned, while the other, Rebecca Slaughter, remains on the commission while she challenges Trump’s firing as illegal.