Trump FTC Seeks Pause in Court Fights on Noncompete Agreements

The Federal Trade Commission wants to pause lawsuits challenging a rule banning worker noncompete agreements as it reviews the prior administration’s position.

In motions filed March 7, the FTC asked the Fifth and Eleventh circuits to hold its appeal in two separate cases for 120 days so the government can provide the courts with a status report regarding next steps.

The agency in both motions cited FTC Chairman Andrew N. Ferguson, who “believes the Commission should reconsider its defense of the challenged rule.”

Ferguson, who became a commissioner in April 2024 and took over as chairman Jan. 20, voted against the ban last year, saying the agency lacked statutory authority to issue the rule.

The FTC last year appealed a Texas federal judge’s decision to prevent the rule from going into effect nationwide, holding that the FTC lacked the authority to adopt such a broad ban.

It separately appealed to the US Court of Appeals for the Eleventh Circuit a district court’s preliminary injunction to block the ban in a case brought by Properties of the Villages Inc., a real estate firm in The Villages, Fla. The district court’s injunction there applied only to the enforcement of the ban against that firm.

The Biden-era FTC led by Chair Lina Khan adopted the noncompete rule in April 2024, saying the ban would give workers freedom to change jobs and foster new business formation. The FTC said roughly 30 million workers—one in five—in the US are subject to a noncompete agreement.

Numerous groups, including the US Chamber of Commerce, opposed the ban, arguing against it on the merits and also saying it was an overreach of the FTC’s power.

The FTC didn’t immediately respond to a request for comment.

The cases are Properties of Villages Inc. v. FTC, 11th Cir., No. 24-13102, 3/7/25 and Ryan v. FTC, 5th Cir., No. 24-10951, 3/7/25.