The FTC Trades Blanket Non-Compete Bans For Case-By-Case Enforcement

Direct Sellers, time to let out a sigh of relief. On September 5, 2025, the Federal Trade Commission (FTC) officially dropped its appeal of a federal court's decision striking down the FTC's rule banning non-competes.¹ But stay vigilant as the FTC's scrutiny of non-competes remains.

No Blanket Non-compete Ban

As reported in our previous articles No More Non-Competes?, Navigating the FTC' s Final Rule Banning Non-Competes: Why Direct Sellers Shouldn't Panic, and Update: FTC' s Noncompete Rule Set Aside, in early 2023, the FTC proposed a sweeping rule that would have banned most non-compete agreements nationwide, including those covering employees and independent contractors.²The FTC's rationale behind the Rule was to promote labor mobility, foster competition, and prevent what the FTC characterized as unfair methods of competition that restrict workers' ability to seek better employment opportunities or start new businesses.³The Rule, if implemented, would