Trump administration drops defense of ban on employee 'noncompete' agreements [View all]

Source: Aol/Reuters

Fri, September 5, 2025 at 8:24 PM EDT


(Reuters) -President Donald Trump's administration abandoned on Friday the U.S. government's legal defense of a rule adopted under former President Joe Biden that had banned agreements commonly signed by workers not to join rivals of their employers or launch competing businesses.

The U.S. Justice Department filed motions in federal appeals courts in New Orleans and Atlanta to dismiss separate appeals of rulings by two judges that struck down the 2024 U.S. Federal Trade Commission rule concerning "noncompete" agreements. Republicans and business groups have criticized the rule.

The move was expected after FTC Chairman Andrew Ferguson, who was appointed to the post by Trump and had previously criticized the rule, said in February that the agency was reviewing it. The appeals involve legal challenges to the rule by a marketing firm and a real estate developer, as well as the U.S. Chamber of Commerce and other business groups.

Dropping the appeals means the courts will not have a chance to address the novel question of whether the commission, which enforces federal antitrust laws, can adopt sweeping regulations such as its nationwide ban on "noncompete" agreements.

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