Home » Commentary » Didn’t the Federal Government Ban Non-Competes?

Amanda DeMatteis: Hi, Josh.

Josh Goodbaum: Hi, Amanda. What are we talking about today?

DeMatteis: I thought we would talk about non-competes. We do a lot of work representing employees that have non-competition agreements in employment contracts, and they come to us and say, “Hey, is this thing enforceable? Is this still a thing?”

There’s been a lot of activity in the federal government surrounding non-competes over the last couple of years. So, tell us where we stand, Josh. Are non-competes still enforceable? Do employees that have them still need to be concerned with them?

Goodbaum: Non-competes are definitely still a thing, Amanda. The Biden Administration took a number of aggressive actions to try to restrict or even outlaw non-competes, but as we sit here today in June 2025, none of them have worked.

So, you may recall that the Federal Trade Commission (or FTC) issued a rule in early 2024 that purported to ban non-competes nationwide, with very few exceptions. That rule, however, was blocked by a federal court in Texas in August of 2024. The court said that the FTC did not have the statutory authority to issue that rule and prevented the rule from going into effect.

Then the Biden Administration went out, the Trump Administration came in, and the composition of the FTC changed. It went from being three Democratic members to two Republican members to being three Republicans to two Democrats, and then Donald Trump purported to terminate the two Democratic members of the FTC – not that their presence really mattered, because with the three Republican-appointed members, the FTC had a majority of Republicans, all of whom seemed to oppose this rule banning non competes.

In March 2025, after this switch in composition, the FTC said to the federal appellate court that would have reviewed the appeal concerning the rule that, “We’d like to just take a pause on this. We need to reevaluate.” Specifically, what the new Republican-appointed chair of the FTC said was, “Hey, my view is that the Commission needs to decide if this is a good idea. We’re gonna review this, and we will let you know.”

Now, this new chair is the same person who, when the FTC passed the rule banning non-competes, issued a dissent. He said, “I don’t know if this is good policy or not, but I don’t think this is legal. I don’t think it’s constitutional. I don’t think we can do it.”

So, everybody sees the writing on the wall that this FTC, with its Republican majority, is not going to push forward with any federal measure banning non-competes, and as for the Trump Administration more broadly, there’s no indication that they’re going to push forward with any measure banning non-competes on a federal level either.

Now, there is at least some bipartisan support for a statute that would ban non-competes federally. That’s been proposed by our home state senator here in Connecticut, Chris Murphy, and a Republican senator, but there’s not been a lot of action on that.

So, really, non-competes remain an issue at the state level, and the law is a state-to-state law.

Here in Connecticut, non-competes are definitely still a thing. They are evaluated under a five-factor test that has basically been the same since the 1970s.

So, if you’re an employee and your lawyer tells you, “Yeah, I don’t think non-competes are really a thing anymore. I think you’re fine,” think again. This is an area where you really want to talk to an expert who is accomplished in and experienced in representing employees in the area of non-competes and other restrictive covenants.

DeMatteis: It’s interesting, Josh, this really is an area where we see other non-employment lawyers getting this wrong. Just remember, if you have a non-compete in Connecticut, it is still potentially enforceable until we hear otherwise.

Thank you so much, Josh. We appreciate it, and thank you for watching. Take care.

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