The FTC Non-Compete Ban: What Florida Business Owners Need to Know Now (April 2025 Update)
Updated: April 14, 2025
The Federal Trade Commission’s (FTC) effort to ban most non-compete agreements nationwide has entered yet another phase of legal uncertainty. As of April 2025, the rule’s implementation remains blocked by federal court challenges. This pause follows an August 2024 decision by a federal court in Texas that barred the FTC from enforcing its final rule, as well as a 120-day stay on the FTC’s appeal requests. Meanwhile, recent leadership changes at the FTC have signaled a possible withdrawal or significant revision of the ban. Until a final resolution emerges, Florida businesses must navigate both existing state laws and the prospect of future federal changes.
What Does This Mean for Florida Businesses?
As of April 2025, your existing non-compete agreements are still enforceable in Florida. Why? A federal court in Texas (in Ryan LLC v. Federal Trade Commission, 3:24-cv-00986 (N.D. Tex.), filed April 23, 2024) blocked the FTC’s rule nationwide, and subsequent appeals by the FTC remain on hold. However, this situation is far from settled. The FTC’s leadership has changed, and there is a chance the Commission might withdraw or significantly modify the rule rather than continue defending it in court. Every Florida business owner should continue to monitor these developments closely.
What is the FTC’s Non-Compete Clause Rule?
The FTC announced its final rule in April 2024, targeting the elimination of most non-compete agreements. The Commission labeled these clauses as an “unfair method of competition” under the FTC Act. If fully implemented, the rule would prohibit businesses from imposing non-compete clauses on nearly all workers, including employees, contractors, and other service providers. The FTC’s final rule spans over 500 pages, so what follows is a simplified overview of its key elements. Until a court decision or FTC withdrawal formally resolves the matter, here are important takeaways for Florida businesses.
Who is Affected by the Rule?
The FTC estimates the ban, if enforced, would affect approximately 30 million workers across various industries. Key provisions include:
- Broad Ban: The rule would invalidate nearly all non-compete agreements.
- Targeted Workarounds: Restrictions also extend to certain non-disclosure and non-solicitation agreements that effectively operate like non-competes (i.e., clauses so broad they functionally restrain an employee from working for a competitor).
Exemptions to the Rule
The FTC’s final rule included narrow exceptions for:
- Non-compete clauses tied to the sale of a business.
- Pre-existing agreements with senior executives earning more than $151,164 annually.
- Agreements breached before the rule’s effective date.
Although these exceptions exist, it’s important to note that the entire rule has been blocked from taking effect. As of now, that means none of the rule’s mandates—including these exemptions—are being actively enforced.
What Do I Need to Do if the Final Rule is Upheld?
Should the rule ultimately go into effect (whether in its current form or a revised version), businesses will be required to notify employees that non-compete clauses are no longer enforceable. Below is the FTC’s sample notice, which was published alongside the final rule:
- A new rule enforced by the Federal Trade Commission makes it unlawful for us to enforce a non-compete clause. As of [DATE EMPLOYER CHOOSES BUT NO LATER THAN EFFECTIVE DATE OF THE FINAL RULE], [EMPLOYER NAME] will not enforce any non-compete clause against you. This means that as of [DATE EMPLOYER CHOOSES BUT NO LATER THAN EFFECTIVE DATE OF THE FINAL RULE]
- You may seek or accept a job with any company or any person—even if they compete with [EMPLOYER NAME].
- You may compete with [EMPLOYER NAME] following your employment with [EMPLOYER NAME].
The FTC clarifies that this potential rule does not affect other terms or conditions of employment. For more details, visit ftc.gov/noncompetes. Translations of the above notice in multiple languages (including Spanish, Chinese, Arabic, Vietnamese, Tagalog, and Korean) are also provided on the FTC’s website.
What Exemptions Exist Under the FTC’s Now-Blocked Rule Banning Non-Compete Agreements?
Despite the rule’s broad scope, the FTC included certain exemptions:
- Non-compete agreements used by nonprofit organizations, which typically lie outside the FTC’s authority.
- Non-compete agreements entered into as part of a business sale (to protect the buyer’s acquired goodwill).
- Agreements breached prior to the rule’s effective date remain lawful under a limited “grandfather” clause, but new ones would be prohibited even for executives.
- Existing non-compete agreements for senior executives remain lawful under a limited “grandfather” clause, but new ones would be prohibited even for executives.
- The FTC defines senior executives as individuals who:
- Earned at least $151,164 in compensation during the previous year, and
- Make policy decisions controlling significant aspects of a business (not merely advisory or limited to a subsidiary).
What Does This Mean for Existing Florida Non-Compete Laws?
You may already be aware that Florida has its own set of robust laws regulating non-compete agreements, generally allowing them when they are reasonable in time, geography, and scope, and protect legitimate business interests. If the FTC’s rule ever became effective, it would take precedence over any less-restrictive state law, including Florida’s. That said, the State of Florida could still enact additional worker protections that supplement the federal rule. It cannot, however, simply ignore or override a valid federal regulation.
How Does This Affect Florida’s Non-Compete Laws?
Currently, Florida’s non-compete statutes (notably Fla. Stat. §542.335) remain fully in force. Until the FTC rule (or any revised version) survives its legal challenges, businesses can continue relying on Florida law to create and enforce valid non-compete agreements. Keep in mind that future developments—such as the FTC reviving the ban or a new settlement—could alter this landscape quickly. Florida could also pass new legislation that provides additional restrictions beyond what federal law might impose.
Final Note (April 2025)
Although the nationwide non-compete ban is currently on hold and may never be enforced in its original form, employers should not become complacent. Existing Florida law still mandates that non-competes be reasonable and tied to a legitimate business interest. Keep an eye on federal developments as the FTC decides whether to withdraw, revise, or continue litigating the rule. In the meantime, Florida business owners can generally proceed under current Florida non-compete statutes without additional federal restrictions.
Protecting Florida businesses through trusted legal guidance. If you have questions about drafting or enforcing non-compete agreements—and wish to be prepared should the FTC ban resume—contact us at FL Patel Law PLLC today.
Stay tuned to our blog for further updates on this evolving topic. With the recent court-ordered pauses and leadership shifts at the FTC, a definitive outcome may arrive in the coming months.
Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. To understand how these potential changes may affect your specific situation, reach out to FL Patel Law PLLC.
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