FTC Pulls Back, Florida Noncompetes Still Stand Strong

The Federal Trade Commission’s withdrawal from defending its nationwide noncompete ban has left Florida’s legal framework firmly in place. For employers, this decision marks the end of one of the most ambitious regulatory efforts in employment law and signals a return to the longstanding patchwork of state-based rules. While the national headlines suggest a clear victory for business groups, Florida employers should take a closer look before celebrating.

The FTC’s noncompete rule, finalized in April 2024, would have prohibited nearly all noncompete agreements across the United States and required employers to notify workers that their existing restrictions were no longer enforceable. Business coalitions immediately challenged the rule, and in August 2024, a Texas federal court held that the FTC had exceeded its statutory authority under the Federal Trade Commission Act. The court found the rule arbitrary under the Administrative Procedure Act and set it aside nationwide.

Appeals were initially filed, but in September 2025, the Commission confirmed it would no longer defend the rule under the current administration. This leaves the Texas district court decision intact, effectively eliminating the nationwide ban.

Why Employers Should Care

The withdrawal has three lasting effects. First, the decision reinforces limits on the power of administrative agencies. The Texas court concluded that the FTC lacked a clear congressional mandate to regulate noncompete agreements. That ruling reflects the “major questions” doctrine, a principle increasingly used by courts to strike down broad regulatory action without explicit statutory authorization. Employers should expect similar challenges to those posed by other expansive rules in the future.

Second, the regulatory focus on noncompetes is shifting back to the states. California, Minnesota, Oklahoma, and North Dakota already prohibit most noncompetes, and many other states impose wage thresholds or reasonableness tests. In Florida, by contrast, courts continue to enforce properly drafted noncompete agreements under section 542.335 of the Florida Statutes, which expressly authorizes restrictive covenants that protect legitimate business interests. That statute remains one of the more employer-friendly frameworks in the country.

Third, the public debate has not gone away. Worker advocates continue to argue that noncompetes depress wages and limit mobility, while employers emphasize the need to safeguard trade secrets, customer relationships, and training investments. Even without a federal ban, employers may face reputational and recruiting risks if their contracts are perceived as overreaching.

Practical Guidance for Florida Employers

Florida businesses should not assume the FTC’s retreat ends the conversation. Instead, it is an opportunity to revisit existing agreements with an eye toward enforceability.

• Audit current agreements. Ensure that restrictions are narrowly tailored in scope, geography, and duration, consistent with Florida’s statutory requirements.

• Evaluate legitimate business interests. Courts in Florida enforce noncompetes only if tied to trade secrets, confidential information, substantial relationships with customers, or specialized training. Agreements that overreach beyond those interests are vulnerable.

• Consider alternatives. Non-solicitation clauses, nondisclosure agreements, and confidentiality protections often provide adequate safeguards with fewer challenges in court.

• Stay informed. State legislatures around the country continue to propose restrictions, and Florida employers operating across state lines must adapt their agreements to differing standards.

  
  

The Road Ahead

The FTC’s decision to step back from defending its nationwide rule is not the final chapter. It does not preclude Congress from taking up the issue in the future, nor does it prevent states from moving forward with their own reforms. For now, employers must navigate a fragmented legal landscape that rewards careful drafting and proactive compliance.

Florida companies that align their agreements with section 542.335 and regularly revisit restrictive covenant policies will be best positioned to withstand both litigation challenges and shifting regulatory winds.